Boomerang Commerce Launches A/B Testing Platform For Pricing

Boomerang Commerce, a startup that helps online retailers optimize their pricing and a 2014 Disrupt NY Startup Battlefield finalist, today announced the launch of its A/B testing service for pricing.

Marketers love A/B testing to see which message works best, but when it comes to pricing, offering two different customers two different prices for the same product can quickly become a recipe for disaster. You’re bound to upset some customers, after all, when they find out they paid more for a product than somebody else. Boomerang CEO Guru Hariharan acknowledges as much. “You can’t just use standard tools,” he said. “If you do that, you’ll lose trust. More often than not, it’s a bad idea.”

So what Boomerang does is allow retailers to test different pricing strategies and algorithms across a small group of products, for example, to test which ones maximize the retailers revenues and profits. The idea here then is less about charging customer A one price and customer B another, but to see which pricing strategies work better. Say you have 100,000 products in your inventory (the company only works with very large retailers that do $25 million or more in online sales). Boomerang now lets them take a representative set of 500 of these and test different pricing strategies on them.

“Merchandizers and analysts at click and mortar retailers have had to wait months to draw conclusive results from price tests,” Hariharan said. “In the digital world, you don’t have that kind of luxury with time and need to make decisions as quickly as possible – often with limited data. This is why we believe that facilitating rapid testing of pricing strategies would help them figure out a way to set the right prices for their products in a timely manner.”

Besides A/B testing, Boomerang also launched a number of other new products over the last couple of months, including a price optimizer that helps retailers manage a product’s pricing lifecycle from introductory pricing all the way to clearance markdowns. The company also recently launched an improve competitive pricing intelligence service that helps retailers stay on top of what their competitors are charging.

The company has grown from 15 employees a year ago to 70 employees now. Hariharan tells me Boomerang’s software now manages about $2 billion in sales every year.