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It is now several years since the dot-com boom and, indeed, even the subsequent bust is starting to fade in the memory. While there may now be some jostling for position by smaller online retailers, it would appear that the larger companies have things all sewn up—Amazon and Play.com for example, or Dabs.com and Misco for computer components. Given that the range of products is largely the same, such companies can find it increasingly hard to differentiate and stand out from the competition.
The arrival of online computer parts retailer IT247 may have slipped under the radar of most.
Perhaps more interesting is the fact that IT247 offers something like three times the number of products (currently around 50,000) offered by Dabs and the others, at a consistently competitive price. Most interesting of all is that the company manages to source, competitively compare prices and offer these products for sale with an order of magnitude less people that its competitors.
The secret behind this competitive advantage is a product called Intoscape. Briefly, what it does is as follows. First, it identifies all the potential suppliers (distributors) of a given product or component, and checks best prices and availability. Just this part of the product might be useful for public sector purchasing and procurement, where you have to have three prices for everything—there are companies such as Ariba that focus on this market alone.
Secondly, it organises the information in a data quality sense, so that the software provides a consistent approach to product numbering, descriptions and so forth. Thirdly, it uses web-bots to check competitive prices for that product and then, rather than simply dumping that information into a spreadsheet (which is the more generally adopted approach), it presents that information directly within the application so that you can look at competitive and supplier pricing side-by-side in order to determine your pricing policy for this item. Further, there are various automated options and rules for this purpose: for example, you might choose to offer the second lowest price, or you might want to base your price on margin plus or some sort of combination of these or other criteria. You can group products and apply the same rules across a group.
Once you have decided on your pricing (either via automation or direct intervention) the software updates your web site automatically. However, that is not the end of the story: Intoscape also takes in third party descriptive information (for example, from CNet) as a part of the process of putting new products on to your web site, it provides automated facilities for publishing keywords to search and comparison engines, and it links directly into ERP, CRM and supply chain management applications.
Of course, there is a lot more to Intoscape than just this outline, but the point is that this is a complete system. There are competing products in the market that have bits and pieces of the functionality that Intoscape offers but I am not aware of anyone that has as complete an offering as this. In particular, the linking of competitive evaluation directly into the pricing module, alongside the supplier-based information provided is, as far as I know, unique.
When IT247 first set up it was able to source and (competitively) price 27,000 products in 16 hours with 2 people. Today, it monitors 200,000 products and publishes a quarter of this number with the same two people, taking just 4 hours for analysis.
Most recently, Intotechnology (the company behind both Intoscape and IT247) has announced its intention to license the Intoscape technology to interested parties. The technology offers IT247 a significant competitive advantage, so it is perhaps surprising that it is ready to sell this to its rivals as well as to other interested parties. However, the company assures me that this has always been its intention. Indeed, some within the company see IT247 as a test bed for Intoscape rather than the other way round. Be that as it may, the software is certainly worth a detailed look by anyone interested, on either the buy side or sell side, in this sort of catalogue environment.