CROSS-REFERENCE TO RELATED APPLICATIONSThis application is a continuation of U.S. patent application Ser. No. 11/746,714, filed May 10, 2007 entitled “Retail System For Selling Products Based On A Flexible Description,” (issued as U.S. Pat. No. 8,150,735) which is a divisional of U.S. patent application Ser. No. 09/540,035 filed Mar. 31, 2000 entitled “Retail System For Selling Products Based On A Flexible Description” (issued as U.S. Pat. No. 7,711,604), which claims the benefit of U.S. Provisional Patent Application No. 60/165,435, filed Nov. 15, 1999 entitled “Uniseller Internet Pricing”.
U.S. patent application Ser. No. 09/540,035 is also a continuation-in-part for each of the following U.S. patent applications:
(i) U.S. patent application Ser. No. 08/889,503, filed Jul. 8, 1997 and issued as U.S. Pat. No. 6,249,772 on Jun. 19, 2001 entitled “Systems and Methods Wherein a Buyer Purchases a Product at a First Price and Acquires the Product from a Merchant that Offers the Product for Sale at a Second Price”;
(ii) U.S. patent application Ser. No. 08/997,170, filed Dec. 22, 1997 and issued as U.S. Pat. No. 6,356,878 on Mar. 12, 2002 entitled “Conditional Purchase Offer Buyer Agency System”;
(iii) U.S. patent application Ser. No. 09/220,191, filed Dec. 23, 1998 and issued as U.S. Pat. No. 7,386,508 on Jun. 10, 2008 entitled “Method and Apparatus for Facilitating a Transaction Between a Buyer and One Seller”;
(iv) U.S. patent application Ser. No. 09/337,906, filed Jun. 22, 1999 and issued as U.S. Pat. No. 6,754,636 on Jun. 22, 2004 entitled “Purchasing Systems and Methods Wherein a Buyer Takes Possession at a Retailer of a Product Purchased Using a Communication Network”;
(v) U.S. patent application Ser. No. 09/359,265, filed Jul. 22, 1999 entitled “System and Method for Facilitating and Managing the Sale of Customized Travel Product Restrictions”; and
(vi) U.S. patent application Ser. No. 09/388,723, filed Sep. 2, 1999 and now abandoned entitled “Purchasing Systems and Methods Wherein a Buyer Takes Possession at a Retailer of a Product Purchased Using a Communication Network”.
Each of the above-referenced applications, including U.S. patent application Ser. No. 11/746,714 (issued as U.S. Pat. No. 8,150,735), U.S. patent application Ser. No. 09/540,035 (issued as U.S. Pat. No. 7,711,604), U.S. Provisional Patent Application No. 60/165,435, U.S. patent application Ser. No. 08/889,503 (issued as U.S. Pat. No. 6,249,772), U.S. patent application Ser. No. 08/997,170 (issued as U.S. Pat. No. 6,356,878), U.S. patent application Ser. No. 09/220,191 (issued as U.S. Pat. No. 7,386,508), U.S. patent application Ser. No. 09/337,906 (issued as U.S. Pat. No. 6,754,636), U.S. patent application Ser. No. 09/359,265, and U.S. patent application Ser. No. 09/388,723, is incorporated by reference herein in its entirety.
The present invention relates to systems for selling products to customers. More specifically, the present invention relates to a system for selling a product to a customer based on a flexible product description provided by the customer.
According to conventional retail pricing systems, a particular product is offered to all potential customers for a single price. Therefore, a conventional retailer endeavors to determine an “optimal” single price for a product that will generate more profit than any other single price.
Shortcomings exist even if a conventional retailer succeeds in determining an “optimal” price. Specifically, profit generated by sales at an “optimal” price will likely be less than a theoretical maximum profit, because some customers will be willing to pay more than the “optimal” price for the product. In this regard, the theoretical maximum profit is a profit resulting from charging each customer a maximum price he is willing to pay. Profit may also fall short of the theoretical maximum because no profit will be obtained from potential customers who are willing to pay more than the retailer's cost for the product but are unwilling to pay the “optimal” price. Due to these and other shortcomings, retailers have experimented with alternative pricing systems intended to generate a profit closer to the theoretical maximum.
Individualized bargaining is one such alternative system. In individualized bargaining, a retailer or a retailer's agent individually negotiates with each potential customer in an attempt to extract a highest price from each customer. However, associated transaction costs incurred by the retailer increase in proportion to the number of transactions. Accordingly, individualized bargaining is not desirable for retailers having more than a few customers, since the associated transaction costs would outweigh any resulting increase in profit from sales.
In view of the foregoing, what is needed is a pricing system for increasing a retailer's profit without incurring unacceptable transaction costs.
Improvements are also needed in other types of conventional pricing systems. For instance, conventional systems for discounting prices create several problems for retailers. According to these conventional systems, a retailer reduces a price of a product from an original price to a lower, discounted price to achieve some goal, such as reducing excess inventory of the product.
As described above with respect to retail pricing, some customers who buy the product for the discounted price may have been willing to buy the product for a higher price, and the retailer therefore loses potential profit. Individualized bargaining, as also described above, can be used to reduce these effects. However, in a vast majority of situations, individualized bargaining involves unacceptable transaction costs. Individualized bargaining also fails to address other problems caused by conventional discount pricing systems, such as price dilution and brand dilution.
Generally, price dilution describes a situation in which a reduction of a product's price decreases demand for the product at a higher price. In more detail, discounting a price of a product causes potential customers to believe that the discounted price is the “correct” price of the product, and therefore the customers become unwilling to accept any higher price for the product. Accordingly, conventional discount pricing systems can negatively affect future profits generated by a product.
Conventional discount pricing systems can also lead to brand dilution. Brand dilution refers to a reduction in the prestige of a brand in the minds of consumers. In this regard, conventional publicized price discounts for a product of a particular brand tend to reduce the amount of prestige that consumers attribute to the brand. Since brand prestige, or “goodwill”, is a valuable asset vigorously protected by successful manufacturers (e.g., via trademark protection), these manufacturers are reluctant to allow retailers to discount prices for their products or to advertise the discounted prices. As a result, it is difficult for retailers to reduce excess inventory of these products.
Certain industries have attempted to address the foregoing deficiencies in conventional pricing systems. For example, the airline industry attempts to set prices for airline tickets based on speculated demand of individual customers. In this regard, each customer is categorized as a leisure traveler or a business traveler based on when a ticket is purchased. For example, a customer who buys a ticket for a flight more than twenty-one days before the flight is categorized as a leisure traveler and a customer who buys a ticket less than twenty-one days before the flight is categorized as a business traveler. Tickets for the flights are priced according to the categorization—lower prices for leisure travelers and higher prices for business travelers.
In view of the foregoing, two customers who submit identical itineraries to a travel agent may pay vastly different prices for tickets to identical flights, if the tickets are bought at different times. Such a result is perceived as unfair by customers. Moreover, a business traveler who purchases a ticket to a flight more than twenty-one days before a flight is categorized as a leisure traveler and therefore pays much less than she is willing to pay, resulting in lost revenue to the airline providing the flight. Accordingly, airline pricing fails to adequately address the deficiencies in conventional pricing systems.
Accordingly, what is also needed is a system for discounting prices which reduces price dilution and brand dilution, and which is perceived as fair to customers.
In consideration of the above needs, Applicants have discovered that customer demand for a product can be approximately quantified based on a customer's specification of desired product values. Applicants have also discovered that retailers are willing to reduce prices in return for customer flexibility in sale terms. In addition, Applicants have invented a system to use these discoveries to efficiently charge different prices to different customers in order to optimize profits while being fair to customers, and to discount prices while minimizing losses, price dilution, brand dilution and perceived unfairness.
The present invention addresses the foregoing by providing, in one aspect, a system in which a sale price is determined based on a product description, and the sale price is transmitted to a customer. In addition, no specific product is identified to the customer as a particular product that will be sold to the customer before an agreement to purchase a product for the sale price is received from the customer. Accordingly, the customer is not guaranteed what specific product will be purchased before an agreement to purchase a product for the sale price is received from the customer.
It should be understood that the customer will agree to the purchase if the customer is willing to accept, in return for the sale price, any product conforming to the product description. Both the customer and retailer benefit as a result of the foregoing system. The customer can receive lower prices in exchange for flexible description parameters and may also receive discounts that would normally not be advertised to the general public for fear of price and brand dilution. The retailer is able to evaluate a customer's individual demand based on the received description and determine a sale price accordingly, thereby reducing losses associated with the single-price systems described in the background. Although the inventive system may result in the sale of a product to two different customers for two different sale prices, the system is perceived as fair by both customers because a higher-paying customer likely agreed to a less flexible product description than a lower-paying customer, and neither customer would have agreed to the other's product description and sale price. The product descriptions received from customers also allow a retailer to determine what condition values are important to customers and to purchase and price regular inventory accordingly.
In addition, the foregoing features allow a retailer to mask product discounts. For example, a retailer may wish to reduce inventory of a product by selling the product at a discounted price. To mask the discount, the retailer chooses undesirable purchase terms under which to sell the product, such as pickup at a faraway location, even if the product is available at a closer location. As a result, the customer believes that the discount is attributable to the undesirable terms, rather than to the product quality or to decreased demand. Accordingly, price and brand dilution are minimized. In other embodiments, a product description is determined based on a sale price. According to some of these embodiments, a retailer receives a first sale price from a first customer, determines a first product description based on the first sale price, and transmits the first product description to the first customer. Similarly, the retailer receives a second sale price from a second customer which is lower than the first sale price, determines a second product description based on the second sale price, and transmits the second product description to the second customer. If a product exists which conforms to both the first product description and the second product description, the retailer may sell the product to the first customer for the first sale price and to the second customer for the second sale price. Even though the two customers pay different sale prices for the same product, the two customers will likely perceive the system as fair because each is agreeing to a different product description corresponding to their sale price. In this regard, the retailer may determine and transmit a broad product description based on the lower second sale price to give the second customer an impression that the product was sold for the second sale price only because the second customer agreed to a broad product description. This latter method is intended to mask any discount reflected by the lower sale price, thereby reducing perceived unfairness and allowing a retailer to sell a product at a discounted price while minimizing price and brand dilution.
The present invention also addresses the problems discussed above by providing, in one aspect, a system in which a product description is received and a product is selected, with a sale price of a particular selected product being a first sale price if the description is a first description and being a second sale price if the description is a second description.
The foregoing aspect provides a system by which a same product may be sold to different customers for different prices. Such pricing may be desirable if a product description received from one customer indicates a greater demand for a particular product than a product description received from another customer. It should be, noted that, in contrast to the airline pricing systems discussed in the background, a system according to this aspect is perceived as fair because different product descriptions are received from each customer, and because each customer would likely not have been willing to purchase a product conforming to the other customer's description for the other customer's sale price.
With these and other advantages and features of the invention that will become hereinafter apparent, the nature of the invention may be more clearly understood by reference to the following detailed description of the invention, the appended claims and to the several drawings attached hereto.
FIG. 1 is a block diagram of a retail system in accordance with one embodiment of the present invention;
FIG. 2 is a block diagram of the retail system controller ofFIG. 1;
FIG. 3 is a block diagram of the customer device ofFIG. 1;
FIGS. 4A and 4B illustrate sample tables of the transaction database ofFIG. 2;
FIG. 5 illustrates a sample table of the customer database ofFIG. 2;
FIGS. 6A and 6B illustrate sample tables of the flexibility database ofFIG. 2;
FIGS. 7 A to7D illustrate sample tables of the product pricing database ofFIG. 2;
FIG. 8 illustrates a sample table of the product description database ofFIG. 2;
FIGS. 9A and 9B illustrate sample tables of the retailer database ofFIG. 2;
FIG. 10 illustrates a sample table of the product database ofFIG. 2;
FIG. 11 illustrates a sample table of the purchase terms database ofFIG. 2;
FIG. 12 illustrates a sample table of a redemption database according to one embodiment of the invention;
FIG. 13 is a flow diagram illustrating process steps of a sales transaction according to an embodiment in which a product description is received from a customer;
FIG. 14 is a flow diagram illustrating process steps to determine a sale price based on a product description according to one embodiment of the invention;
FIG. 15 is a flow diagram illustrating process steps to determine a sale price based on a product description according to one embodiment of the invention;
FIG. 16 is a flow diagram illustrating process steps to select a product conforming to a product description according to one embodiment of the present invention;
FIG. 17 is a flow diagram illustrating process steps to process a product redemption according to one embodiment of the present invention;
FIG. 18 is a flow diagram illustrating process steps of a sales transaction according to an embodiment in which a sale price is received from a customer;
FIG. 19 is a flow diagram illustrating process steps to determine a product description based on a sale price according to one embodiment of the invention; and
FIG. 20 is a flow diagram illustrating process steps of a sales transaction according to an embodiment in which a product description and a sale price are transmitted to a customer.
FIG. 21 is a flow diagram illustrating process steps of a transaction for the sale of airline tickets according to one embodiment of the invention.
To ensure clarity of the following detailed description, set forth below are definitions of terms used herein. The scope of the present invention is not to be deemed limited by the definitions.
Condition: a category of values which are descriptive of a product (see definition below) and/or a transaction. Examples include Manufacturer, Features, and Pickup Location.
Condition value: a specific value corresponding to a condition. Using the above examples of conditions, corresponding condition values may be “Sony”, “27 in.”, and “New York”.
Conforming product: a specific product deemed to meet the requirements of a product description or a sale price.
Customer: any person, group of people, or other entity that patronizes a retailer (see definition below) and who purchases products from the retailer.
Mutually-exclusive condition: a condition, such as Manufacturer, for which a conforming product possesses only one condition value. In order for a product to conform to a product description, the product must include only one condition value for each mutually-exclusive condition in the product description. Therefore, when mutually exclusive condition values are added to a product description, a number of products conforming to the product description usually increases.
Mutually-inclusive condition: a condition, such as Features, for which a conforming product may contain more than one condition value. In order for a product to conform to a product description, the product must include each mutually-inclusive condition value in the product description. Therefore, when mutually-inclusive condition values are added to a product description, a number of products conforming to the product description usually decreases.
Product: a specific good or service, usually identified by a make and model number. Identical products sold by a retailer may be assigned an identical product identifier such as a Uniform Product Code (“UPC”) or Stock Keeping Unit (“SKU”), while different products are usually assigned different product identifiers.
Product category: a classification of a product, or the general type of product a customer desires. Examples include Standard Television, Home Computer, and Airline Ticket.
Product description: a set of condition values that describes a product (see Product-specific condition) and may also describe a sales transaction (see Transaction-specific condition).
Product-specific condition: a condition relating to a product, e.g. Manufacturer, Features, etc. Contrast with Transaction-specific condition, defined below.
Purchase terms: Sale-related terms which are accepted by a customer. Purchase terms may comprise a product description, a sale price, and a retailer's agreement to sell a product conforming to the product description for the sale price.
Redemption information: Information specifying a specific product to be sold and information relating to the mechanics of a sales transaction, such as payment method, pickup location, and time of redemption.
Retailer: any person, group of persons, or entity that provides the sale of products to customers. Examples include a manufacturer, an online store, a traditional “brick-and-mortar” store, a sales broker, and an online “storefront” selling products offered by traditional stores.
Retailer data: data accessible by or on behalf of a retailer which can be used to determine sale prices based on received product descriptions, product descriptions based on received sale prices, and/or whether to encourage sales of particular products. Retailer data may include sales data, inventory data, demand data or subsidy data.
Sale Price: a price for which a product is sold to a customer. A sale price according to the invention is often less than a retail price, which is a price for which a product is sold through conventional channels.
Transaction-specific condition: a condition relating to details of a sales transaction, e.g. Pickup Location, Pickup Date, Payment Method, etc.
FIG. 1 is a block diagram of a retail system in accordance with one aspect of the present invention. As shown, aretail system100 according to embodiments of the present invention includes aretail system controller200 that is in communication withcustomer devices220,230 and240 through acommunication network210. Thecommunication network210 may be a Local Area Network or a Wide Area Network to which thecontroller200 and thecustomer devices220,230 and240 are connected. Other examples of networks usable in the present invention include a satellite-based network, a cellular network, an RF network, a telephone network, a cable television network, a bulletin-board system, or any other network for transferring data between locations. Also, even though thecommunication network210 is illustrated as an intermediary between theretail system controller200 and thecustomer devices220,230 and240, it should be noted that direct connections may also exist between thecontroller200 and thecustomer devices220,230 and240.
In a case thatcommunication network210 is the World Wide Web (“Web”), theretail system controller200 may include a Web server for receiving requests for Web pages (documents on the Web that typically include an HTML file and associated graphics and script files), for generating Web pages, and for transmitting Web pages over the Web. The Web server allows communication between theretail system controller200 and the Web (communication network210) in a manner known in the art.
Each of thecustomer devices220,230 and240 may comprise computers, such as those based on the Intel® Pentium® processor, that are adapted to communicate with thecontroller200 over thecommunication network210. Each of thecustomer devices220,230 and240 may also comprise a portable computer, a dedicated terminal, an Internet kiosk, a Personal Digital Assistant, a pager, a cellular phone, a pay phone, a video game console, an Automated Teller Machine, a slot machine, a watch, a vending machine, or any other device capable of receiving and transmitting data over thecommunication network210. For example, in a case that thecommunication network210 is the Web, each of thecustomer devices220,230 and240 may execute a Web browser application for requesting, receiving, and reviewing Web pages. Any number of customer devices may be in communication with thecommunication network210 and thecontroller200.
Those skilled in the art will understand that devices in communication with each other need not be continually transmitting to each other. On the contrary, such devices need only transmit to each other as necessary, and may actually refrain from exchanging data most of the time. For example, a device in communication with another device via the Web may not transmit data to the other device for weeks at a time.
FIG. 2 illustrates an embodiment of thecontroller200. Thecontroller200 may be implemented as a system controller, a dedicated hardware circuit, an appropriately programmed general purpose computer, or any other equivalent electronic, mechanical or electro-mechanical device.
Thecontroller200 ofFIG. 2 comprises aprocessor250, such as one or more Intel® Pentium® processors. Theprocessor250 is coupled to acommunication port260 through which thecontroller200 communicates with other devices, such as thecustomer devices220,230 and240, throughcommunication network210. Thecontroller200 may also communicate with locally attached devices through thecommunication port260. Accordingly, thecommunication port260 may be adapted to communicate using protocols supported by thecommunication network210 and the locally attached devices.
Also connected to theprocessor250 are aninput device270 and adisplay280. Theinput device270 can be any device for inputting data, such as a keyboard, a touch screen, a mouse, a voice input device, an infrared port, or the like. Theinput device270 can be used by a retailer to enter data for use by thecontroller200 in accordance with the invention. Of course, data may also be input to thecontroller200 by a retailer using a device connected directly to thecontroller200 or to thecommunication network210. Thedisplay280 is used to display graphics and text and may be a CRT computer monitor, a flat-panel display or another display device.
Theprocessor250 is also in communication with adata storage device290. Thedata storage device290 is generally a data memory and may include any appropriate combination of magnetic, optical and/or semiconductor memory. Thedata storage device290 may also include, for example, Random Access Memory (RAM), Read-Only Memory (ROM), a compact disc and/or a hard disk. Furthermore, thestorage device290 and the other elements ofFIG. 2 may each be, for example: (i) located entirely within a single computer or other computing device; or (ii) connected to each other by a remote communication medium, such as a serial port cable, telephone line or radio frequency transceiver. In one embodiment, thecontroller200 comprises one or more computers that are connected to a remote server computer for maintaining databases.
Thedata storage device290 stores aprogram300 of processor-executable process steps for basic operation of thecontroller200. Theprocessor250 executes the process steps of theprogram300 and thereby operates in accordance with the present invention, and particularly in accordance with the methods described in detail herein. Theprogram300 may be stored in a compressed, uncompiled and/or encrypted format. The process steps of theprogram300 can be stored in thestorage device290 during manufacture of thestorage device290, can be downloaded from a compact disc or other computer-readable medium, or can be retrieved from a remote or local source via thecommunication port260 in the form of a signal having the process steps encoded thereon.
Thedata storage device290 also stores processor-executable process steps for basic operation of thecontroller200, such as the process steps of an operating system, a database management system and “device drivers” for allowing thecontroller200 to interface with computer peripheral devices. These latter process steps are known to those skilled in the art, and need not be described in detail herein.
According to one embodiment of the present invention, the steps of theprogram300 are transferred from thedata storage device290 into a main memory, such as a RAM, and executed therefrom by theprocessor250. In alternative embodiments, hard-wired circuitry may be used in place of, or in combination with, processor-executable software process steps for implementation of the processes of the present invention. Thus, embodiments of the present invention are not limited to any specific combination of hardware and software. Moreover, steps performed in accordance with the invention may be allocated between thecontroller200 and thecustomer devices220,230 and240.
Thestorage device290 also stores (i) anoffer database400, (ii) acustomer database500; (iii) aflexibility database600, (iv) aproduct pricing database700, (v) aproduct description database800, (vi) aretailer data database900, (vii) aproduct database1000, (viii) apurchase terms database1100, and (ix) aredemption database1200. Thedatabases400 to1200 are described in detail below and depicted with sample entries in the accompanying figures. In this regard, and as will be understood by those skilled in the art, the schematic illustrations and accompanying descriptions of the databases presented herein are merely intended to demonstrate operable and preferred systems for associating and storing information. A number of other data structures may be employed besides those suggested by the tables shown. For example, rather than using database tables as described herein, the present invention may be implemented using only rules-based methods or a combination of database tables and rules-based methods. Similarly, the illustrated entries of the databases represent sample information only; those skilled in the art will understand that the number and content of the entries can be different from those illustrated herein.
FIG. 3 illustrates several elements of thecustomer device220 according to one embodiment of the invention. In this embodiment, thecustomer device220 is used to input data and instructions to theretail system controller200, and to present data from theretail system controller200 to a customer. As shown, thecustomer device220 includes aprocessor221, such as an Intel® Pentium® processor or the like, connected to acommunication port222. Thecommunication port222 transmits data to and receives data from external devices such as a printer, scanner, or the like, and therefore supports communication protocols used by the external devices. Also connected to theprocessor221 is aninput device223 for receiving data from a customer and adisplay224 for presenting data to the customer. Theinput device223 and thedisplay224 can be any of the input devices or displays discussed above.
Astorage device225 is connected to theprocessor221, and stores data and processor-executable process steps for the operation of thecustomer device220. For example, thestorage device225 stores data and process steps of anoperating system226 which controls the operation of thecustomer device220. Also stored in thestorage device225 are processor-executable process steps of aWeb browser227, which can be executed by theprocessor221 to provide communication between acustomer device220 and theretail system controller200 through the Web. Of course, depending on the nature of the connections between thecustomer device220, thecommunication network210, and thecontroller200, other known applications or hardware may be needed for thecustomer device220 to communicate with theretail system controller200.
FIG. 4A illustrates a tabular representation of a portion of theoffer database400 according to one embodiment of the present invention. Theoffer database400 stores data relating to offers submitted by customers to theretail system controller200. The tabular representation includes a number of sample records each including details of an offer consisting of a customer-input product description. Those skilled in the art will understand that thedatabase400 may include any number of records. In the tabular representation shown, thedatabase400 includes fields associated with each of the records. The fields specify: (i) anoffer identifier402 that uniquely identifies a particular record; (ii) acustomer identifier404 that uniquely identifies the customer from whom a product description contained in the record was received; (iii) a Manufacturer406 (if any) specified in the received product description; (iv) Features408 (if any) specified in the received product description; (v) Pickup Locations410 (if any) specified in the received
product description; (vi) Product States (if any)412 specified in the received product description; and (vii) anoffer status414 of an offer represented by the record. Usage of the data stored in theoffer database400 will be discussed in detail below.
FIG. 4B illustrates a tabular representation of theoffer database400 according to another embodiment of the present invention. In this embodiment, a customer initiates a transaction by submitting a sale price and is thereafter presented with a product description based on the sale price. The tabular representation includes several records, each of which represents a single offer and contains several fields. Specifically, each record contains theoffer identifier402, thecustomer identifier404, and thestatus414 as described above, as well as an offeredprice416. The offeredprice416 associated with a particular record is the sale price submitted by the customer to initiate the offer represented by the record. Operation of the embodiment reflected inFIG. 4B is described below in conjunction withFIGS. 18 and 19.
FIG. 5 illustrates a tabular representation of a portion of thecustomer database500 stored in thestorage device290. The tabular representation includes a number of sample records and fields for each of the records. The fields specify: (i) acustomer identifier502; (ii) acustomer name504;customer contact information506; and (iv) apayment identifier508.
For each record in thecustomer database500, thecustomer identifier502 identifies a customer to whom data in the record correspond. In one embodiment, thecustomer identifier502 serves as a link between the data in the databases used in the invention. For example, acustomer identifier404 in theoffer database400 identifies a same customer as anidentical customer identifier502 in thecustomer database500.
The first name and last name of a customer are stored as thecustomer name504, and contact information provided by the customer is stored ascustomer contact information506. The contact information may include one or more of a street address, an e-mail address, a telephone number, a facsimile number, a pager number, or any other information using which a customer can be contacted.
Thepayment identifier508 of a record includes information that can be used to charge a sale price to and/or extract payment from a customer. The tabular representation shown inFIG. 5 includes credit card numbers asexample payment identifiers508. In a case that apayment identifier508 is used only to charge a sale price to a customer, thepayment identifier508 need not be maintained after the sale price has been charged. Accordingly, for security reasons, it may be desirable to delete thepayment identifier508 from thecustomer database500 after a sale price has been charged to the customer and to substitute apayment identifier508 such as “PAID”.
FIG. 6A illustrates a tabular representation of a portion of theflexibility database600 according to an embodiment in which a flexibility score is determined based on a product description and a sale price is determined based on the flexibility score. Specific details of the operation of this embodiment will be described in detail below.
Theflexibility database600 as shown inFIG. 6A includes data grouped according to a particular product category. For each product category,conditions610 and corresponding flexibility points620 are stored. Generally, and as will be described below, theflexibility database600 is used to determine a flexibility score based on condition values in a product description. For example, using the tabular representation ofFIG. 6A, each Manufacturer value specified in a product description adds ten points to a flexibility score. The points are added because each additional Manufacturer value in a product description may increase a number of conforming products that can be selected by a retailer, and therefore may increase a retailer's flexibility in selecting a product to sell. On the other hand, each Feature value in a product description reduces a flexibility score by five points, since each Feature value added to a product description likely reduces a number of conforming products. More generally, positive flexibility points620 are associated with mutually-exclusive conditions610 and negative flexibility points620 are associated with mutually-inclusive conditions610. It should be noted that theflexibility database600 may includeadditional conditions610 and corresponding flexibility points620, as well asconditions610 and corresponding flexibility points620 for additional product categories.
FIG. 6B illustrates a tabular representation of a portion of theflexibility database600 according to another embodiment of the invention. In this embodiment, acondition value630 for a product category is associated with a number of flexibility points640 and aweighting factor650. Aweighting factor650 determines an effect that an associatedcondition value630 has on a determined sale price. Usage ofweighting factors650 will be described below with respect toFIG. 14.
As described with respect toFIG. 6A, the data shown inFIG. 6B are used to determine a flexibility score of a product description, which in turn is used to determine a sale price. As also described, theflexibility database600 ofFIG. 6B may includeadditional condition values620, flexibility points640, andweighting factors650 for the Standard TV product category and for additional product categories.
Shown inFIG. 7 A is a tabular representation of a portion of theproduct pricing database700 according to one embodiment of the invention. As shown, the tabular representation includes several ranges offlexibility scores710 andcorresponding sale prices720 for a particular product category. Since the ranges offlexibility scores710 andcorresponding sale prices720 will likely vary across product categories, a portion of theproduct pricing database700 such as that illustrated inFIG. 7 A exists for each product category defined by a retailer.
Theproduct pricing database700 according to this embodiment is used to determine a sale price based on a product description flexibility score. For example, after reception of a product description from a customer, a flexibility score is determined using aflexibility database600 such as that described with respect toFIGS. 6A and 6B. Next, ascore range710 including the determined flexibility score is located in a portion of theproduct pricing database700 corresponding to an appropriate category, and asale price720 corresponding to the locatedscore range710 is determined to be the sale price. A detailed description of this process is set forth below.
FIG. 7B illustrates a tabular representation of a portion of theproduct pricing database700 according to another embodiment of the invention. In contrast to theproduct pricing database700 as represented inFIG. 7 A, theFIG. 7B representation includespercentage discount data730 corresponding to eachflexibility score range710. F or a given flexibility score of a product description, correspondingpercentage discount data730 is determined using theproduct pricing database700 ofFIG. 7B and is applied to a specified price in order to determine a sale price. Specifics of this embodiment are also described below. It should be noted that theproduct pricing database700 ofFIG. 7B may include data for additional product categories.
A representation of a portion of theproduct pricing database700 according to another embodiment is shown inFIG. 7C. TheFIG. 7C representation includes, for a particular product,sale prices740 corresponding to various ranges of flexibility scores710. Of course, theproduct pricing database700 ofFIG. 7C may include data for other products. Usage of theproduct pricing database700 according toFIG. 7C is described below. Generally, a conforming product is selected based on a received product description, a flexibility score corresponding to the product description is calculated, and data of theproduct pricing database700 ofFIG. 7C which corresponds to the selected product is used to determine a sale price. Accordingly, in contrast to the embodiments reflected inFIGS. 7 A and7B, products of a same product category may be priced differently in response to a single product description.
FIG. 7D illustrates a tabular representation of a portion of theproduct pricing database700 according to yet another embodiment. According to this embodiment, which is described in detail below, a product description is evaluated based on predefined requirements to determine a percentage discount. The percentage discount is then used to determine a sale price.
The tabular representation shown inFIG. 7D includes data for a specific product category. A set ofrelated condition750,requirement760, andpercentage discount data770 is stored for the specific category. Generally, eachcondition750 is associated with any number ofrequirements760, with each requirement corresponding to apercentage discount770. For example, according to the first record in the illustrated table, a 0% discount corresponds to a product description including only one Manufacturer value. Of course, theproduct pricing database700 as shown inFIG. 7D includes additional data for the Standard TV product category and data for other product categories.
Although theFIGS. 7 A to7D databases associated a greater flexibility with a higher flexibility score, it should be noted that a greater flexibility may be represented by 5 a lower flexibility score. Of course, the discounts and/or prices associated with flexibility scores in the illustrated databases would be altered accordingly.
FIG. 8 shows a tabular representation of a portion of theproduct description database800 according to one embodiment of the present invention. Theproduct description database800 is used in embodiments in which a customer inputs a sale price and is presented with a corresponding product description. Theproduct description database800 may include additional data to that shown inFIG. 8 and data for additional product categories.
The tabular representation includes, for a product category, several ranges ofproduct discounts810 anddescription broadening rules820 corresponding to each range. In one contemplated use, an input sale price is compared to an average retail price of an input product category in order to calculate a percentage discount reflected by the input sale price. Description broadening rules820 corresponding to the percentage discount are identified and used to create a product description. For example, using the data shown inFIG. 8, if the received sale price reflects a fifteen percent discount off the average retail price, a product description is created specifying two manufacturers, two guaranteed features and two pickup locations. Advantages, variations and further details of the above process will be set forth in the following discussion.
Theproduct description database800 may also be used to determine a sale price based on a received product description. In this regard, arule820 most closely fitting an input product description is identified, and adiscount810 associated with the identified rule is applied to a specified price to determine a sale price corresponding to the product description.
FIG. 9A illustrates a tabular representation of a portion of theretailer data database900 according to one embodiment of the invention. The illustrated portion stores information concerning products within a single product category. The tabular representation includes several records, each comprising several fields. The fields specify: (i) amanufacturer902; (ii)current inventory904; (iii) forecastedcurrent inventory906; and (iv) a current/forecastedinventory ratio908.
Themanufacturer902 of a record indicates a product manufacturer, thecurrent inventory904 represents a number of products in current inventory produced by the manufacturer, and the forecastedcurrent inventory906 represents a forecasted current amount of inventory produced by the manufacturer. The current/forecastedratio908 for a particular record reflects thecurrent inventory904 of the record divided by the forecastedinventory906, and is used in one embodiment, described in detail below, to determineweighting factors650 of theflexibility database600 as represented inFIG. 6B. It should be noted that additional retailer data for the Standard TV product category and for other product categories can be included in theretailer database900.
Another tabular representation of a portion of theretailer data database900 is illustrated inFIG. 9B. The data within the tabular representation are similar to that shown inFIG. 9A, except that instead of each record being directed to aparticular manufacturer902, each record is directed to a particular product identified by aproduct identifier910. In an embodiment to be described below, current/forecastedratios908 ofFIG. 9B are used to determine which of two conforming products should be selected by theretail system controller200 to fill a customer-accepted offer. Of course, data for additional products may be contained in theretailer database900 ofFIG. 9B.
A portion of theproduct database1000 is represented in a tabular form inFIG. 10. Each record in the tabular representation represents one product, and comprises: (i) aproduct identifier1002; (ii) amanufacturer1004; (iii) features1006; (iv)pickup locations1008; (v) product states1010; (vi) a minimumacceptable price1012; and (vii) aretail price1014.
For each record, theproduct identifier1002 identifies a particular product available from a retailer. In one embodiment, theproduct identifier1002 for a product is identical to aproduct identifier910 used in theretailer data database900 to identify the same product. Themanufacturer1004 identifies the manufacturer of the particular product, thefeatures1006 identify the features of the particular product, thepickup locations1008 identify locations at which the product is available, and the product states1010 identify physical states, such as new or used, in which the particular product is available. The minimumacceptable price1012 indicates a minimum price at which theretail system controller200 is permitted to sell the product, and theretail price1014 specifies the price of the product when sold through conventional channels. Other types of data, as well as data for products other than those shown, may be included in theproduct database1000.
FIG. 11 shows a tabular representation of thepurchase terms database1100 according to one embodiment of the invention. The data shown inFIG. 11 are sample data, and are not intended to reflect acomplete database1100. The tabular representation comprises several records, each of which includes (i) apurchase terms identifier1102; (ii) anoffer identifier1104; and (iii) generatedpurchase terms1106. The purchase terms identifier1102 identifies a particular record in thedatabase1100. In other embodiments, thepurchase terms database1100 also includes a product identifier identifying a product to be sold to the customer. Theoffer identifier1104 identifies a particular offer initiated by a customer-input product description or price, and can be used to reference related data associated with anidentical offer identifier402 from theoffer database400.
The generatedpurchase terms1106 include terms generated by theretail system controller200 and accepted by the customer. For example, in a case that a transaction was initiated by customer input of a product description, the generatedpurchase terms1106 would include a corresponding sale price generated by thecontroller200. On the other hand, if the transaction was initiated by customer input of a sale price, the generatedpurchase terms1106 would include a generated product description.
FIG. 12 illustrates a portion of a tabular representation of theredemption database1200. Theredemption database1200 includes several records containing associated fields. The fields specify: (i) aredemption identifier1202; (ii) apurchase terms identifier1204; (iii) aproduct identifier1206; (iv)redemption information1208; and (v) aredemption status1210. Upon receiving a redemption identifier from a customer, thecontroller200 locates anidentical redemption identifier1202 in thedatabase1200. A purchase terms identifier1204 associated with theredemption identifier1202 is then used to retrieve associated data from thepurchase terms database1100 needed to validate and process a redemption of the product identified by theproduct identifier1206. Theredemption information1208 specifies details of a redemption such as transaction-specific condition values under which a redemption must take place, and theredemption status1210 indicates a status of the redemption identified by the record.
FIG. 13 illustrates a flow diagram1300 of process steps for an embodiment of the present invention in which a customer inputs a product description and receives a sale price in response. In an embodiment where thecontroller200 performs the process steps ofFIG. 13, the process steps may be embodied in hardware within thecontroller200, in processor-executable process steps stored on a computer-readable medium such as thestorage device290 and executed by theprocessor250, in processor-executable process steps encoded in an electronic signal received by thecontroller200 and executed by theprocessor250, or in any combination thereof. It should be noted that each other flow diagram of process steps described herein may be similarly embodied. In addition, the particular arrangement of elements in the flow diagram1300, as well as the other flow diagrams discussed herein, is not meant to imply a necessary order to the steps; embodiments of the present invention can be practiced in many different orders.
TheFIG. 13 process steps begin atstep1302, in which a product description is received from a customer. In one embodiment, a product category is also received with the product description. The product description is a set of condition values describing a desired product. For example, the product description “Sony”, “Magnavox”, “Toshiba”, “Picture-in-Picture”, and “‘New’”, describes both a new twenty-seven inch Magnavox television with picture-in-picture as well as a new thirty-five inch Sony television with picture-in-picture, digital comb filter, V-chip, and surround sound features. It should be noted that a product description may also include limiting condition values, such as “27 in. to 35 in.”.
In one embodiment, a customer inputs the product description prior tostep1302. For example, a customer using thecustomer device220 selects the product category Standard Television and inputs the product description “Sony”, “Magnavox”, “Toshiba”, “Picture-in-Picture”, and “New” using theinput device223 and thedisplay224. In this regard, the interface provided by thecustomer device220 for input of the product description may present retailer-defined conditions for which values are selected by the customer using well-known graphical user interface elements such as pull-down menus, check boxes, or radio buttons. Text-entry boxes may also be provided for customer entry of condition values. The product description may be input in any number of other ways depending on the nature of thecustomer device220, such as by using voice recognition or character recognition, or from a computer-readable medium storing a product description. In another embodiment, thecustomer device220 presents the customer with several product descriptions, and the customer inputs a product description prior to step1302 by selecting one of the presented product descriptions. It should be noted that thecustomer device220 used to input the product description may be located within a store operated by a retailer.
Returning to step1302, the condition values of the received product description are stored in appropriate fields of theoffer database400 along with anoffer identifier402 generated to identify the present offer and acustomer identifier404 that identifies the customer. Also stored in association with the product description is astatus414 of “Pending System”.
Instep1304, a sale price is determined based on the received product description. Several systems for determining the sale price are discussed below with respect toFIG. 14 andFIG. 15; these systems primarily use data stored in theflexibility database600, theproduct pricing database700, and theretailer data database900. After the sale price is determined, the sale price is transmitted to the customer instep1306. Accordingly, the associatedstatus414 is updated to “Pending Customer” to reflect that the system is awaiting acceptance or rejection of the sale price.
In one embodiment, the sale price is transmitted from theretail system controller200 over thecommunication network210 and back to thecustomer device220 from which the product description was received instep1302. After reception of the sale price, thecustomer device220 displays the sale price to the customer using thedisplay224. Of course, in a case that thecustomer device220 does not have adisplay224, the sale price is communicated to the customer in some other manner, such as through a speaker or a printout. The sale price may also be transmitted to the customer instep1306 using other known methods.
In another embodiment, the sale price transmitted instep1306 is specified in terms of a discount amount, such as “25% off the retail price of the selected product”, or “$50 off the retail price of the selected product”.
Transmitted along with the sale price are other purchase terms which facilitate formation of a binding agreement between the customer and the retailer. The other purchase terms include, in one embodiment, the received product description and an offer from the retailer to sell a product conforming to the product description for the sale price. However, thecontroller200 does not transmit, instep1306, and before an agreement to purchase a product for the sale price is received, any information to the customer identifying a particular product to be sold to the customer upon completion of the transaction. The customer is also not guaranteed, before an agreement to purchase a product for the sale price is received, what specific product will be purchased. By avoiding transmission of this information, a retailer is provided with flexibility in selecting a product to sell after the customer is bound to the agreement. However, in another embodiment, specific details of two or more particular products are transmitted to the customer instep1306 along with an indication that an unspecified one of the particular products will be sold to the customer upon receiving an agreement from the customer. This embodiment also provides the retailer with some flexibility in selecting a product to sell after the customer is bound.
It should be noted that a particular product conforming to the product description mayor may not be selected prior tostep1306.
Afterstep1306, it is determined instep1308 whether or not the customer agrees to the sale price. In one embodiment, the customer is required to select an “I Agree” symbol displayed on thedisplay224 and the selection is transmitted to theretail system controller200 via thecommunication network210. Of course, other known systems for communicating an agreement can be used instep1308. The customer may also be required to provide customer and payment information, such as a credit card number, so that the retailer is ensured of payment. The customer and payment information are stored in thecustomer database500 along with an associatedcustomer identifier502. In other embodiments, the customer and payment information are received with the product description instep1302, and a credit check/pre-authorization for the sale price is performed prior to transmission of the sale price instep1306.
If it is determined instep1308 that the customer does not agree to the sale price, the process steps ofFIG. 13 terminate. In some embodiments, the customer can edit the product description rather than agree to the sale price, or theretail system controller200 can suggest changes to the product description that would reduce the sale price. Once it is determined that the customer agrees to the sale price, flow continues to step1310.
Instep1310, a product is selected that conforms to the product description. One system for such selection is described below in conjunction withFIG. 16. After the conforming product is selected instep1310, redemption information is transmitted to the customer instep1312. In one embodiment, the redemption information includes specific details identifying the selected product and selected transaction-specific details such as pickup location and redemption time. The transaction-specific details may be selected so as to mask a discount reflected in the sale price, as will be described in detail with reference toFIG. 16. In another embodiment, the customer is not presented with information identifying the selected product until the product is redeemed. In this regard, the product may not even be selected until the customer attempts to redeem the product. The latter arrangement provides retailers with significant flexibility in choosing a product to sell and retailers may therefore significantly discount products redeemed in this manner.
The redemption information may be transmitted via thecommunication network210 used to receive the product description or by another communication network. In a case that the product will be picked up by the customer at a retail location, also transmitted instep1312 is a redemption identifier embodied in a paper voucher, a personal identification code, a frequent shopper card, or other record of purchase details. Similarly to step1205,step1312 may also be performed once a customer arrives at a retail location to pick up a product.
A product redemption is processed instep1314. In one embodiment, a product redemption involves receiving a redemption identifier from a customer and presenting the customer with a corresponding product identified in theredemption database1200. The retailer presented with the redemption identifier need not be in communication with theretail system controller200. In this regard, the presented redemption identifier may represent, perhaps in encoded form, all the information needed for the redemption, such as the information shown in theredemption database1200. In addition, there may be no need to process a product redemption in a case that the selected product is shipped to the customer. Details of product redemption will be discussed with respect toFIG. 17.
It should be noted that the foregoing process steps do not describe each embodiment of the invention. For example, a conforming product may be selected any time after a product description is received. In another embodiment, a customer is presented with suggestions to change a product description after the product description is received, in a case that no conforming product is available or for other reasons. Moreover, a sale price and alternative product descriptions may be transmitted instep1306. The alternative product descriptions may be similar to the received product description but with different condition values. In this embodiment, it would be determined instep1308 whether the customer agreed to the sale price and to what product description the customer agreed.
The customer and the retailer benefit as a result of theFIG. 13 process steps. Specifically, the customer can receive lower prices by providing flexible description parameters and may receive discounts that would not be given to the general public for fear of price and brand dilution. The retailer is able to evaluate a customer's individual demand based on the received description and determine a sale price accordingly, thereby reducing losses associated with conventional retail pricing systems. In embodiments where the retailer does not select the product to sell until well after the customer agreement, the retailer further benefits by being able to optimize the ordering of inventory based on outstanding offers. Although the process steps may result in a single product being sold for different sale prices, the system is perceived as fair because a higher-paying customer likely agreed to a different product description than a lower-paying customer, and neither would have agreed to the other's product description and sale price. The product descriptions received from customers also allow a retailer to determine what features are important to customers and to purchase and price inventory accordingly.
FIG. 14 illustrates a flow diagram1400 of process steps that may be used instep1304 ofFIG. 13 to determine a sale price based on a received product description. The process steps begin atstep1402, in which a number of flexibility points is determined for each condition value in the received product description. The number of flexibility points is determined using theflexibility database600 as represented inFIG. 6A. In operation, a condition value in the description is determined to correspond to a number of flexibility points620 associated with the corresponding condition in theflexibility database600. Next, instep1404, the flexibility points corresponding to each condition value are summed to determine a flexibility score.
As an example ofsteps1402 and1404, a case is considered in which a flexibility score is determined for the product description “Sony”, “Magnavox”, “Toshiba”, “V-chip”, “stereo sound”, and “Picture-in-Picture”. According to thedatabase600 as represented inFIG. 6A, the condition values “Sony”, “Magnavox” and “Toshiba” are determined to correspond to +10 flexibility points each, and the remaining feature values are determined to correspond to −5 flexibility points each. Accordingly, the flexibility score corresponding to the product description is fifteen (10+10+10−5−5−5=15).
According to another embodiment, steps1402 and1404 are performed using data shown in theflexibility database600 ofFIG. 6B. Flexibility scores are determined using theflexibility database600 ofFIG. 6B by multiplying, for eachcondition value630, a corresponding number of flexibility points640 with acorresponding weighting factor650. Using the previous product description, the condition values “Sony”, “Magnavox”, “Toshiba”, “V-chip”, “stereo sound”, and “Picture-in-Picture” would correspond to flexibility points (+10×5)=+50, (+10×0.5)=+5, (+10×1)=+10, (−5×1)=−5, (−5×4)=−20 and (−5×3)=−15, respectively. Accordingly, a flexibility score of 50+5+10−5−20−15=25 would be determined instep1302.
As described above, aweighting factor650 of theflexibility database600 may reflect the desirability of a corresponding condition value in view of retailer data. For example, if aratio908 ofcurrent inventory904 of amanufacturer902 to forecastedinventory906 of themanufacturer902 in theretailer database900 is 5, the retailer may wish to price the manufacturer's products so as to increase sales thereof. Accordingly, the retailer would like to associate a high flexibility score with received product descriptions including the desired manufacturer as a condition value. Therefore, acorresponding weighting factor650 in theflexibility database600 ofFIG. 6B is set to 5. On the other hand, a current/forecastedratio908 of 0.5 indicates that a second manufacturer's products are selling better than expected. Since the retailer would likely prefer to continue selling these products without a discount, inclusion of the second manufacturer in a product description does not significantly increase the flexibility available to the retailer in selecting a product to sell. As a result, the weighting corresponding to the second manufacturer is set to 0.5 in thedatabase600 ofFIG. 6B.
The embodiment of theflexibility database600 illustrated inFIG. 6B thereby allows retailer data such as inventory, sales, demand and subsidies to be used in creating a flexibility score which more accurately reflects a flexibility and a desirability of a particular description. For example, manufacturers of certain products may offer subsidies to a retailer to promote sales of the products. Therefore, condition values630 representing the subsidized products are associated with relativelylarge weighting factors650 so that a product description to which a subsidized product conforms will likely produce a high flexibility score.
In one embodiment, weighting factors650 are generated for each condition value in each product category, either manually or using ratios as shown inFIGS. 9A and 9B. It should also be noted that other retailer data can be used in determiningweighting factors650 corresponding to particular condition values, such as current sales v. forecasted sales, current sales lower than current demand, and current inventory higher than historical inventory. Moreover, the weighting factors650 can be updated periodically or in “real time” by triggering off of changes made to the retailer data.
Returning to the flow diagram1400, a sale price is determined instep1406 based on the flexibility score by using theproduct pricing database700. In the embodiment of thedatabase700 represented inFIG. 7 A, the previously-determined flexibility score of 25 corresponds to a sale price of $250. Thecorresponding sale prices720 shown inFIG. 7 A can be derived in many ways. Theprices720 may be based on a range of previously-offered discount prices of products within the product category, on a range of percentage discounts off an average retail price of products in the category, on incremental price steps between the lowest and highest retail prices in the product category, or on any other data. It should be noted that thesale prices720 in theproduct pricing database700 are not necessarily related to a product which will be eventually sold to the customer.
Using theFIG. 7B embodiment of thedatabase700, the flexibility score of 25 corresponds to a 20% discount, and the sale price is determined instep1406 by applying thepercentage discount730 to a retail price corresponding to the product category. The retail price to which thediscount730 is applied may be a retail price of a product already selected for sale to the customer, a retail price of another conforming product, an average retail price of conforming products, or another price. Again, the retail price is not necessarily related to the product which will be eventually sold to the customer.
In a case that a conforming product for sale is selected prior to determination of a sale price, data shown inFIG. 7C are used to determine the sale price instep1406. As shown, the data associate aflexibility score710 with asale price740 for a particular product. For example, in a case that product P-1000 was selected and a flexibility score of 25 was determined prior to step1406, a sale price of $250 is determined using the data ofFIG. 7C.
It should be noted that thedatabases600,700 as shown inFIG. 6A toFIG. 7B may be organized by specific product rather than by product category. In this case, a product is selected prior to step1304 and entries of thedatabases600,700 corresponding to the selected product are used as described above to determine the sale price instep1406.
FIG. 15 illustrates a flow diagram1500 of process steps to determine a sale price based on a product description (step1304) according to another embodiment of the invention. The process begins atstep1502, in which theretail system controller200 determines a number of condition values specified in the product description for each condition. Next, instep1504, a discount is determined for each condition using theproduct pricing database700 as illustrated inFIG. 7D. Specifically, for eachcondition750, anappropriate requirement760 is identified and apercentage discount770 associated with the requirement is determined. For example, in a case that a product description includes three manufacturer values and two features, percentage discounts of 10% and 5% are determined instep1504.
Instep1506, a cumulative discount corresponding to the product description is calculated by summing the determined percentage discounts. In the previous example, the cumulative discount is 15%. Next, instep1508, the sale price is determined by discounting a particular retail price by the cumulative discount. The particular retail price may be a retail price of a specific conforming product, an average retail price of the subject product category, or any other price.
It should be noted that thepercentage discounts770 stored in theproduct pricing database700 ofFIG. 7D may be condition value-specific as described with respect toFIG. 6B. In this case, therequirements770 would include particular condition values, and discounts, either weighted or unweighted, would be associated with each value. As also described with respect toFIGS. 6A to 7B, theproduct pricing database700 ofFIG. 7D may be organized by specific product rather than by product category. In this case, a product is selected prior to step1304 and entries of thedatabase700 corresponding to the selected product are used as described above to determine the sale price instep1508.
In another embodiment ofstep1304, theretail system controller200 stores product descriptions and associated sale prices. Accordingly, in this embodiment, a stored product description most similar to the received product description is identified and a sale price is determined to be equal to a sale price associated with the stored product description. Still other methods for determining a sale price based on a product description will be apparent to those of ordinary skill in the art.
FIG. 16 illustrates a detailed flow diagram1600 of process steps to select a product that conforms to a product description according to step1310 ofFIG. 13. Initially, atstep1602, theproduct database1000 is searched to identify products that conform to the product description received instep1302. When searching thedatabase1000, it is not necessary to consider products having a minimumacceptable price1012 greater than the sale price determined instep1304.
Instep1604, a product to sell is selected from the identified conforming products. In one embodiment, transaction-specific condition values conforming to the product description are also selected instep1604. The selection of a product and of condition values can be based on many different factors. For example, a product may be selected that optimizes profit, inventory, sales, demand, subsidies, or any other variable. In this regard, a product having excess inventory may be selected for sale even though the determined sale price reflects a substantial discount off the retail price.
A retailer may be more likely to sell a product at a discount in a case that the received product description includes an undesirable transaction-specific condition value, such as pickup at an inconvenient location, because the undesirable value can be used to mask the discount. In other words, although the product may be available at a more convenient location, the retailer can select to sell the product at the inconvenient location specified in the product description. The customer will therefore tend to feel like the discount was earned, and other customers paying more for the product but picking up the product at a convenient location will feel fairly treated. Moreover, price and brand dilution can be minimized because the discount will be attributed to the details of the transaction rather than to the product.
Many other transaction-specific conditions can be used to justify and/or mask a product discount, such as Time of Redemption and Product State. The Time of Redemption condition specifies a time period during which the customer is willing to wait before redeeming the product. In a case that a customer has specified a Time of Redemption value such as three months, theretail system controller200 can use the customer's willingness to wait for the product as an apparent reason for offering a large price discount. Moreover, the retailer may be willing to discount a price of a product in exchange for future demand guaranteed by the three month condition value, because the retailer will be able to reorder inventory tailored to the future demand or to select a particular product instep1310 that hasn't sold well through conventional channels.
The Product State condition may have values such as “new”, “used”, “refurbished”, “demo”, or the like. These values are useful because a retailer may want to discount a non-new product to dispose of products that aren't selling and that cannot be returned to the manufacturer. The non-new condition values may also be used to justify a discount in an attempt to minimize price dilution, brand dilution, and perceived unfairness.
A retailer may have other reasons for selecting a particular product and particular transaction-specific condition values. For example, if a new or remote pickup location is specified in a product description along with other locations, a retailer may choose to select a product to be picked up at the specified location simply to increase customer traffic at the new or remote location.
Instep1606, thepurchase terms database1100 is updated. Thedatabase1100 is updated by creating a purchase terms identifier1102 corresponding to thecurrent offer identifier1104 and by storing the generatedpurchase terms1106 in conjunction with the createdpurchase terms identifier1102. Next, instep1608, theredemption database1200 is updated by generating aredemption identifier1202 and associating thepurchase terms identifier1204, aproduct identifier1206 identifying the selected product (if any), and any transaction-specific redemption information1208 therewith. Also associated therewith is aredemption status1210.
FIG. 17 illustrates a flow diagram1700 of process steps to process a customer redemption of the selected product according to one embodiment ofstep1314 ofFIG. 13. The process begins atstep1702, wherein a redemption identifier is received from the customer. The redemption identifier may be embodied in a voucher, a personal identification code, or the like transmitted to the customer instep1312. The redemption may occur at a retail store or, in a case that the product will be shipped to the customer, may be initiated by transmission of the redemption identifier from acustomer device220 to theretail system controller200. In a case thatredemption information1208 associated with a record indicates that a redemption must occur at a future time, a retailer may send a reminder to an associated customer that the future time is approaching.
Instep1704, the redemption is analyzed to validate whether all requirements for the transaction are satisfied. According to one embodiment ofstep1704, the received redemption identifier is used to locate a corresponding record in theredemption database1200 and, specifically, to locateredemption information1208 associated with the redemption identifier. The current redemption is then analyzed instep1704 to determine whether the current redemption satisfies the details of theredemption information1208. For example, it is determined instep1704 whether the customer is picking up the product at the location and time specified in theredemption information1208, if any. In other embodiments, the received redemption identifier encodes redemption information such as theredemption information1208 and the redemption identifier is decoded to retrieve the information used instep1704.
It is then determined, instep1706, whether a payment has been received from the customer. In one embodiment, this determination is made by referring to theredemption status1210 of the corresponding record in theredemption database1200. If payment has not been received from the customer, flow proceeds fromstep1706 to step1708 to receive payment from the customer. The payment may be in any form acceptable to the retailer, such as cash, check, credit card, debit card, or the like. In a case that the redemption is not conducted in-person, it may be easiest to receive payment by credit card. In some embodiments, payment is guaranteed with payment information in conjunction with customer acceptance of a received sale price. In this regard, the customer may be charged a penalty if he does not attempt redemption.
If the payment has been received, the customer is presented, instep1710, with the product identified by theproduct identifier1206 of the corresponding record. If the corresponding record does not include aproduct identifier1206, the product is also selected instep1710. The presentation may include handing the product to the customer or shipping the product to the customer. In this regard, the product may be a software-based product which is shipped to the customer by encoding the product in an electrical signal and sending the signal to acustomer device220 over thecommunication network210 using an appropriate transmission protocol.
FIG. 18 illustrates a flow diagram1800 of process steps of a sales transaction according to another embodiment of the present invention. Generally, the process steps differ from those illustrated inFIG. 13 in that a sale price is received from a customer and a product description is determined based on the sale price.
In more detail, a sale price is received from a customer atstep1802. The sale price may be received in any known manner, including those specified above with respect to step1302 ofFIG. 13. In alternative embodiments, the sale price received instep1802 is in the form of a range of sale prices, a percentage discount off a retail price, or a discount amount off a retail price. A product category may also be received along with the sale price. For example, the data “$200” and “Standard Television” may be received instep1802. The received sale price may also be specified in terms of a discount, such as “$10 less than retail price” or “20% off retail price”, or a range of values, such as “$400 to $425”. In one embodiment, the received sale price is stored in the offeredprice field416 of theoffer database400 in association with anoffer identifier402 created to represent the current offer.
Next, instep1804, a product description is determined based on the received sale price. In one embodiment, a database may be used which contains, for each product category, several ranges of sale prices and a product description corresponding to each range. In this embodiment,step1804 is performed simply by identifying the range of prices in which the received sale price falls and obtaining the corresponding product description. In a variation of this embodiment, several descriptions may correspond to each range of sale prices.
In another embodiment, theproduct description database800 is used instep1804 to identify a rule802 corresponding to the received sale price. A product description is created based on the corresponding rule802, with the condition values of the product description identifying related or similar values. For example, if the rule802 calls for three manufacturers, three low-end or three high-end manufacturers may be included in the created product description. Details of another embodiment ofstep1804 will be described in conjunction withFIG. 19.
Afterstep1804, the product description is transmitted to a customer instep1806. The transmission can be performed using one of the methods discussed with respect to step1306, or using other known methods. In one embodiment, the product description is transmitted with purchase terms which, along with a customer's agreement to the product description, creates a binding contract to purchase a product. The purchase terms may include the received sale price, the product description, and an offer from the retailer to sell a product conforming to the product description for the sale price. In another embodiment, thecontroller200 does not transmit, instep1806, any information to the customer identifying a particular product to be sold to the customer before an agreement to purchase a product conforming to the product description is received. Thecontroller200 also does not guarantee to the customer, before an agreement to purchase a product conforming to the product description is received, what specific product will be purchased. By avoiding transmission of this information, a retailer is provided with flexibility in selecting a product to sell after the customer is bound to the sale.
Alternatively, two or more particular products are identified to the customer instep1806 along with an indication that an unspecified one of the particular products will be sold to the customer upon receiving an agreement from the customer. This embodiment also provides the retailer with some flexibility in selecting a product to sell after the customer is bound.
Next, in step1808, it is determined whether the customer agrees to purchase a product conforming to the product description for the sale price. Similar mechanisms to those described in conjunction withstep1308 can be used to determine whether the customer has made such an agreement. If the customer does not agree, theFIG. 18 process steps terminate. The customer may have an opportunity to resubmit the sale price in hopes of receiving another product description, or the customer may have the option of submitting a new sale price. If the customer agrees, flow proceeds to step1810.Steps1810 to1814 proceed similarly tosteps1310 to1314 and detailed descriptions thereof are omitted for the sake of brevity.
According to theFIG. 18 process steps, the retailer may sell a same product to two customers for two different sale prices. However, the two customers will likely perceive the system as fair because each is agreeing to a different sale price and product description. In addition, the retailer may determine a broad product description based on the lower sale price to give an impression that the lower sale price is available only because the lower-paying customer agrees to a broad product description. This method masks any discount reflected in the lower sale price, reduces perceived unfairness and allows a retailer to sell a product at a discounted price while minimizing price and brand dilution.
FIG. 19 illustrates a flow diagram1900 of process steps according to one embodiment ofstep1804. The process steps can be used to determine a product description based on a received sale price.
First, products which conform to the sale price received instep1802 are identified by referring to the minimumacceptable prices1012 of theproduct database1000. Specifically, for each product of a product category received instep1802, an associated minimumacceptable price1012 is compared with the received sale price. The products having an associated minimumacceptable price1012 less than the received sale price are identified as conforming products instep1902. For example, if the received sale price is $300, products P-1000 and P-1002 ofFIG. 10 are identified as conforming products.
Instep1904, products for which discounts are preferred are selected from the identified conforming products. In one embodiment, only those conforming products that are selling more slowly than forecasted are selected instep1904. These slow-selling products can be identified from theretailer database900 as those having a current/forecastedratio908 of less than unity. In the present example, the product having an identifier910 P-1000 is selected as a product for which discounts are preferred. It should be noted that more than one product may be selected instep1904.
Of course, other methods may be used and other retailer data considered when selecting preferred products to discount instep1904. For example, it may be preferable to determine a desired price for each identified conforming product and to select only those products for which the desired price is less than the received sale price.
Instep1906, a product description is created which covers the products selected instep1904. In one embodiment, the created product description includes all mutually-exclusive condition values present in each selected product. In addition, the product description includes only those mutually-inclusive conditions present in all selected products. Using these guidelines and the data representing product identifiers1002 P-1000 and P-1002 in theproduct database1000, a product description is created including the mutually-exclusive condition values “Magnavox”, “Toshiba”, “Stamford”, “Hartford”, “Teaneck”, “New”, and “Refurbished”, and the mutually-inclusive condition value “Picture-in-Picture”.
Instep1908, the created product description is broadened in order to mask any discount that may result from the sale of a product at the sale price. In general, the description is broadened by removing condition values for mutually-inclusive conditions and by adding condition values for mutually-exclusive conditions. By broadening the product description, any discount will appear to be due to the customer's willingness to accept the uncertainty presented by a flexible product description.
In one embodiment ofstep1908, the description is broadened based on a percentage discount off a retail price reflected by the sale price. The retail price may be a retail price of a particular product to be sold to the customer, in a case that the particular product has been selected, an average retail price of the products selected instep1802, or another retail price. As shown in theFIG. 8 representation of theproduct description database800, ranges ofpercentage discounts810 and associateddescription broadening rules820 are established for a product category. In operation, a percentage discount is calculated, acorresponding range810 is located in theproduct description database800, anddescription broadening rules820 associated with the range are identified. It is then ensured that the description created instep1804 is at least as broad as specified in the identified rules. If not, condition values are added (for mutually-exclusive conditions) and/or removed (for mutually-inclusive conditions).
In another embodiment ofstep1908, theproduct description database800 is organized by product rather than by product category. Accordingly, a product is selected to sell prior to step1908, a percentage discount reflected by the sale price is calculated, and data in thedatabase800 corresponding to the product is accessed to identify appropriatedescription broadening rules820 corresponding to thepercentage discount810.
The description may also be broadened instep1908 to include mutually-exclusive condition values normally possessed by expensive products in order to encourage the customer to agree to the product description. On the other hand, the product description may be broadened to describe lower-quality items in order to give a customer agreeing to the product description a pleasant surprise when the customer learns that the product to be purchased is a better-quality product.
FIG. 20 illustrates a flow diagram2000 of process steps of a sales transaction according to yet another embodiment of the invention. The process steps are used to determine a product description and a sale price and to transmit the product description and the sale price to a customer.
Specifically, a product description and a sale price are determined instep2002. In one embodiment,step2002 occurs in response to customer input of a product category. The product description may be determined instep2002 based on a manual entry or using an automated analysis of retailer data, with the sale price being determined based on the product description using any of the methods described above. Alternatively, the sale price can be determined based on a manual entry or using an automated analysis, with the product description being determined based on the sale price as described above or by using other methods.
Next, instep2004, the product description and sale price are transmitted to acustomer device220 from which the product description and sale price can be presented to customers. For example, the product description and the sale price may be transmitted to a publicly-located kiosk or ATM machine, where they can be presented to customers approaching the kiosk or ATM machine for information or banking services. Alternatively, a retail store can include such kiosks for display of information and special deals to browsing customers. In addition, the product description and the sale price may be transmitted to electronic price tags and presented to customers thereby.
In one embodiment, the product description and the sale price are transmitted along with information to facilitate formation of a binding agreement between the customer and the retailer. The information may include the product description, the sale price and an offer from the retailer to sell a product conforming to the product description for the sale price. It is contemplated to avoid transmitting, before receiving an agreement to purchase a product conforming to the product description for the sale price, any information to the customer identifying a particular product to be sold to the customer upon completion of the transaction. It is also contemplated to avoid guaranteeing to the customer, before receiving an agreement to purchase a product conforming to the product description for the sale price, what specific product will be purchased. By avoiding transmission of this information, a retailer is provided with flexibility in selecting a product to sell after the sale is secured. In another embodiment, specific details of two or more particular products are also transmitted to the customer instep2004 along with an indication that an unspecified one of the particular products will be sold to the customer upon receiving an agreement from the customer. This embodiment also provides the retailer with some flexibility in selecting a product to sell after a sale is secured.
Thereafter, instep2006, it is determined whether a customer has agreed to purchase a product conforming to the product description for the sale price.
The customer can indicate agreement in any known manner, including using thecustomer device220 from which the sale price and the product description were presented to the customer.Steps2008,2010 and2012 proceed similarly tosteps1310,1312 and1314 ofFIG. 13, respectively, and descriptions of these steps are therefore omitted for the sake of brevity.
FIG. 21 illustrates a flow diagram2100 of process steps to sell an airline ticket according to one embodiment of the present invention. The process steps begin atstep2102, in which a product description describing a desired air travel itinerary is received from a customer. The description may be submitted using any of the methods described with respect to step1302. The description may include one or more condition values corresponding to the conditions Departure City, Departure Date, Departure Time, Arrival City, Arrival Date, Arrival Time, Airline, Class, or the like. In one embodiment, the condition values are specified in terms of a range, such as a Departure Time condition value of “1:00 pm to 4:00 pm”.
Instep2104, theretail system controller200 determines a sale price corresponding to the product description. The sale price may be determined based on any of the methods discussed with respect to step1304, or using other methods. The sale price is then transmitted to the customer instep2106. In one embodiment, also transmitted instep2106 is an agreement from the retailer to sell, for the sale price, an airline ticket for flights that conform to the product description.
Next, instep2108, an agreement is received from the customer to purchase an airline ticket for flights conforming to the product description for the sale price. In one embodiment, thecontroller200 does not transmit, before an agreement to purchase an airline ticket for the sale price is received, any information to the customer identifying a particular flight on which the purchased airline ticket will allow the customer to travel. The customer is also not guaranteed, before an agreement to purchase an airline ticket for the sale price is received, to what specific flight or flights the airline ticket corresponds. By avoiding transmission of this information, a retailer is provided with flexibility in selecting an airline ticket to sell after the customer is bound to the agreement. However, in another embodiment, specific details of two or more particular flights are transmitted to the customer instep2108 along with an indication that the airline ticket that will be sold will allow the customer to travel on an unspecified one or more of the particular flights. This embodiment also provides the retailer with some flexibility in selecting a ticket to sell after the customer is bound.
An airline ticket for flights conforming to the product description is selected instep2110. In one embodiment, the selection of the airline ticket and flights is delayed so as to give the retailer an opportunity to determine what flights will not sell out and to bind the customer to those low-demand flights. Afterstep2110, the identity of the selected flights is transmitted to the customer instep2112.
It should be noted that the airline ticket may be selected at any time after the product description is received instep2102. It should also be noted that the alternative arrangements discussed in sections I. to III. may be incorporated, where appropriate, to the steps ofFIG. 21.
The following are several examples that illustrate additional embodiments of the present invention. These examples do not constitute a definition of all possible embodiments, and those skilled in the art will understand that the present invention is applicable to many other embodiments. Further, although the following examples are briefly described for clarity, those skilled in the art will understand how to make any changes, if necessary, to the above-described embodiments to accommodate these and other embodiments and applications.
According to an additional embodiment, a customer-input product description includes condition values weighted or ranked in order of preference. The condition values may be weighted by assignment of a dollar amount to each condition value, or by using “slider” bars of a graphical user interface to indicate an amount of preference. The condition values in such a product description therefore do not reflect absolute requirements of a conforming product, but guidelines for selecting a product. Accordingly, such a product description provides significant flexibility to a retailer in selecting a product to sell. The retailer may be willing to provide a deep discount in exchange for this flexibility.
In another embodiment, the customer is bound to the transaction for a specified period but the retailer is not. Accordingly, once the customer has accepted a sale price/product description, the retailer can choose to sell a conforming product to a customer at any time within the specified period. The retailer may also choose not to sell a product to the customer during the specified period, based on inventory, demand from other buyers, competitors' prices, or other factors. Again, the retailer may be willing to offer a substantial discount in exchange for the flexibility provided by such an arrangement.
As mentioned above, the present invention advantageously allows a retailer to collect data regarding condition values desired by customers. Therefore, in one embodiment, theretailer system controller200 includes an optimization program that orders or reorders inventory tailored to the collected data. Such a program could, for example, identify the most-commonly desired condition values and order products that conform to those condition values. In identifying the most-commonly desired condition values, the optimization program can give more weight to the condition values of received product descriptions which result in a sale, as opposed to condition values of received product descriptions which do not result in a sale.
The collected data may also be used to determine a perceived value of various condition values. The perceived values may be used in cases where the retailer cannot satisfy a received product condition by replacing unsatisfiable condition values with satisfiable condition values having similar perceived values.
Theretail system controller200 may also include a list of preferred products to sell. In a case that a listed product conforms to a received product description, a retailer may be willing to transmit a discounted sale price. On the other hand, if no listed products conform to the received product description, the retailer may transmit suggested changes to the product description so as to persuade the customer to submit a product description to which a listed product conforms.
In another embodiment, theretail system controller200 considers the transaction history of a customer from whom a product description/sale price was received during determination of a sale price/product description based on the received description/price. For example, a first-time customer may be presented with a substantial discount or a narrow product description in order to retain the customer. Theretail system controller200 may also consider other customer activities during determination of a sale price/product description. In this regard, a customer may “earn” additional flexibility points, price discounts or a narrower product description by filling out a surveyor by providing additional product descriptions during the sales transaction. For example, a first customer who submits a product description and agrees to complete a survey receives a lower sale price than a second customer who submits an identical product description and does not agree to complete the survey. The lower sale price may be determined by using a morefavorable flexibility database600 and/orproduct pricing database700 for the first customer than the second customer. Similarly, a first customer who submits a sale price and agrees to complete a survey receives a narrower product description than a second customer who submits an identical sale price and does not agree to complete the survey. This latter scenario may be implemented by using a more favorableproduct description database800 for the first customer.
In responding to reception of a product description from a customer, the retailer may present alternatives that foresee the customer's response. For example, the retailer may present a customer with a low price and a product description which conforms closely, but not exactly, to the received product description, with a high price and a product description having more desirable mutually-inclusive condition values than the received product description, and, with the received product description, a price between the high price and the low price. Such an approach increases a likelihood that an agreement will be reached, and provides the retailer with an opportunity to move undesirable products or to generate greater profit. This approach may also be incorporated into embodiments in which a sale price is received from a customer.
While the present invention has been described above with respect to several embodiments, the scope of the invention is not deemed limited to the above embodiments. Rather, the present invention covers all embodiments falling within the scope and spirit of the following claims as well as equivalent arrangements thereof.
