Profitero: Meet IBM's favourite start-up

Volodymyr Pigrukh won IBM’s Seedcamp contest. But what does his product do for retailers? Rebecca Hobson met him to find out

How does the online division of Britain’s biggest supermarket chain ensure its prices are competitive, that its margins are optimised and its stock managed efficiently to minimise waste?  

With the help of Profitero - no, not the Italian desert but a 13-man, one-year-old old tech start-up that counts French hypermarket Auchan, online retailer Explosive Nutrition and Tesco Direct as customers.

Headquartered in Ireland with a sales team in London and the development core in Belarus, Profitero’s do-it-yourself online application offers retailers the ability to monitor data on their competitors and thousands of products on a daily basis.

So impressed was IBM by the user-friendly dashboard and data crunching software that it awarded Profitero the winner of the 2011 IBM Smartcamp London. Profitero won the award over 80 other entries due to its “outstanding technology, innovative business plan and alignment with IBM’s Smarter Planet strategy,” said IBM.

Profitero

The CEO and co-founder of Profitero is Ukraine-born Volodymyr Pigrukh, a former employee of Microsoft, Accenture and Google. Pigrukh boasts degrees in international business and computer science and once owned his own mobile phone business – where he learnt first-hand the importance of keeping one step ahead of your competitors.

The application is very intuitive says Pigrukh. “Customers can login to their account from any computer – no download of any software is necessary – and track the data. This way we help retailers determine prices and the management of products. They become more efficient, generate more sales and increase their market share.”

Once the client has had its account created (this can take three days to two weeks) and the initial set up and induction is complete, there are online tutorial to help clients should they struggle with this, Profitero sits in the “background”, monitoring the data and ensuring it remains of the highest quality.

By keeping track of competitors’ stock and pricing, retailers can start to manipulate prices accordingly. It might be contrary to common sense, says Pigrukh, but there examples of where retailers can increase their margins by reducing their prices to gain more market share.

Other examples include putting up prices when competitors are out of stock or offering more expensive alternatives.

Profitero is not the only, nor the first, provider of product analysis for retailers. There are a number of other European firms that provide a similar service admits Pigrukh, “But we are positioned best in terms of technology and our application is very scalable.”

It is this ability to modify, adapt, and to scale up and down the programme to suit the retailor that gives Profitero its USP argues Pigrukh. It also allows for adaptive costs too. For SMEs, Profitero charges between £200-£1,000 per month and retailers can opt for a monthly subscription service. The more products monitored by Profitero the cheaper the service.

For larger retailers, the firm offers a yearly contract, varying between £1,000-£5,000 per month.

This flexible approach to the technology and customer service, Pigrukh believes, is made possible because Profitero is still a start-up – only a year old.  

“We’re very agile. The main advantage of start-ups is the size and the speed with which you can move. We act much faster and have faster decision making.”

Having won the award Profitero will now receive three months of mentoring from IBM. Pigrukh plans to use this time to learn how best to develop and expand the business model. And the timing is spot on. Profitero just secured £1m of funds through venture capital and the Enterprise Ireland initiative.

In 2012 the company will expand into the US and grow its presence in Europe. It also wants to develop the programme further, integrate new services. One such service could be price optimisation; a feature that would suggest possible price ranges for products. Another feature Pigrukh is keen to install is analysis of the sales impact of the software which would outline the estimated sales uplift from price management.

But before any of that, Pigrukh is off to compete in IBM’s Global Entrepreneurship Competition taking place in the new year. No doubt his team are already monitoring their competitors.

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