Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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The system continually improves on its pricing recommendations. "If it projects a retailer will sell 10 items at a particular price and it sells only nine, it will adjust the pricing for the next promotion," Walker says.
Pricing strategies can also help retailers in niche markets that offer limited windows for making sales.
At the National Ballet of Canada, for example, box office manager Julia Drake faces the constant challenge of filling as many seats as possible at the highest price. "There's a huge appetite for ballet—if we price it right," she says.
The price ballet
While the National Ballet has a strong base of subscribers who pay full price for season tickets, it doesn't have enough to fill seats at full prices. So it has introduced DanceBreak to lure in younger fans, offering them the chance to get great seats that might otherwise go empty.
Through online bidding technology from Price Whispers Inc., which uses algorithms to figure how many seats will be available at show time, ballet fans age 16 to 29 can log onto DanceBreak.ca and place bids for tickets at less than half the usual ticket prices of close to $200.
"They tell us how much they would pay, such as $60, $70 or $80, then they quickly receive an e-mail from us saying if we've accepted their bid," Drake says. Winning bidders then click to the ballet company's site to complete purchases.
Putting the right price before its customers has helped the National Ballet to both expand its customer base as well as fill more seats, Drake says.
As more retailers learn the art of matching price and consumer interests, better sales and margins will follow.