In 2011, a startup company in Seattle known as Decide.com initiated a bold ambition of building a price-prediction engine for zillions of consumer products, but mostly technology gadget. The company deployed powerful computer to obtain data feeds from e-commerce sites and other price and product information that could be ofund on the Internet.
Not only the company had to collect the ever changing pricing data at all times, it also collect texts to analyse words to identify when a product was being discontinued or a newer model was due to be launched, which is crucial in determining prices of outgoing and incoming products at this crossroad of the product life cycle.
Over a one year period, Decide.com was analysing 4 million products using over 25 million price observations. This observation revealed oddities in the retail world that people had never been able to see before - prices might temporarily increase for older models once new models are introduced. Most people would purchase the outgoing models believing that the price would drop for the incoming models to make their way to the consumers, thus ended up paying more for outgoing models!
Decide.com can spot unusual price spikes and warn consumers to wait. The company achieves an accuracy rate of 77% and provide an average potential savings of $100 per product. It is so confident with its prediction that it will reimburse the price difference to paying members of the service.
The huge success of Decide.com get noticed and the company has been acquired by eBay. The following announcement is taken from the website of Decide.com:
Decide community and friends,
As you may have heard, Decide was acquired by eBay, the worldwide commerce leader.
Since we started three years ago, weve been on a mission to bring you a more transparent shopping experience and help you feel more confident in your purchase decisions - in fact, we've been downright obsessed with it.
Over the past year, we began experimenting with eBay and discovered an exciting opportunity to apply our team's strength in data and predictive analytics to help over 25 million eBay sellers make smarter decisions and be more successful.
We want to thank you - our loyal users, members, media partners and investors. You supported and trusted us and are the reason we have this incredible new opportunity ahead of us.
We will continue to bring you the same innovative products and thinking as part of the eBay family. Thank you for being a part of our journey!
Mike Fridgen CEO