Kris Kubicki first got the idea behind Dynamite Data while writing a blog called DailyTech, launched in 2005. “Part of my job was to write down prices of semiconductors as they went to market,” he says.
Due to his background as a computer programmer and hacker (he says he was once suspended from high school for downloading the personal data of fellow students from the school’s database), Kubicki, now 29, was determined to automate the laborious process of collecting pricing data from individual online sites.
Today, Kubicki is chief architect of Dynamite Data, a price-tracking company he co-founded in 2007 with Internet entrepreneur Larry Barber. Every day, Dynamite’s proprietary technology extracts pricing and inventory information from more than 30 million online “buy” pages from around 3,000 retailers globally.
Each day, the company sifts through 100 terabytes of data, about one-fifth the amount processed by Facebook. The company’s clients include major electronics manufacturers such as Samsung, as well as retailers like Abt Electronics in Chicago.
Dynamite’s data serves as a power tool for both online and bricks-and-mortar retailers. For years, retailers have complained about “showrooming,” where consumers visit a physical store to check out a product and then buy it online. Online retailers face similar issues: According to a July 2012 survey by Forrester Research, 30 percent of online shoppers started their research at Amazon.com, giving the Internet giant a distinct advantage in terms of competitive pricing.
“It’s not going to go away,” says Dynamite’s chief executive, Diana Schulz, referring to showrooming. “The consumer wants to be treated fairly.”
Thanks to Amazon and other online retailers, the frequency of price changes has increased, which initially made it more difficult for bricks-and-mortar retailers to compete. But as electronic shelf labels grow in popularity, stores will have the ability to change prices with relative ease, giving them a way to use Dynamite’s price updates to their advantage.
“Our clients can receive our data in four different forms,” says Schulz. Dynamite provides a Web-based tool complete with dashboard; executive-level reports deliver to their inboxes; pricing alerts; and raw data feeds, which are especially popular with physical retailers.
Armed with Data on the Showroom Floor
Salespeople armed with such data can pull up Amazon’s real-time prices as well as those from other retailers on the sales floor, giving them information that allows them to lower prices or offer other benefits to close the sale. More recently, investment analysts are starting to take notice, using Dynamite’s price tracking to help value the companies they’re tracking.
And from its start, large manufacturers have subscribed to Dynamite to help verify the pricing of their products at retailers both in the U.S. and internationally.
“It gives a lot of power to managers of lines and brands and products,” says Terry Jones, founder of Travelocity.com and chairman of Kayak.com.
Unlike those e-commerce travel services, however, Dynamite Data provides information to businesses, not consumers.
Jones, who serves on Dynamite Data’s advisory board, says the company reminds him more of American Airlines, where he worked from 1978 to 2000. “When the airlines were regulated, their computer systems were connected, so they could see each other’s prices,” he says. “When they became deregulated, they could still see each other’s prices, which became a competitive tool.”
Processing Inventory and Pricing Changes
According to Kubicki, keeping data on electronics’ pricing fresh and accurate isn’t nearly that easy. “You have to grab those live pages everyday worldwide,” he says. “A lot of that parsing is machine learning.”
If the technology is comparing prices on products that don’t match or if it doesn’t account for items that must be added to the shopper’s online cart to get the lowest price, the value of that pricing information is essentially worthless. Dynamite Data’s technology tracks pricing, stock status, product ratings and rebate information, and the company holds four years’ worth of historical data.
Kubicki says we’re living in the “age of disintermediation,” a fancy of way of saying that everyone these days goes online to check the price of everything.
“Our goal is transparency,” he says. “Every day, we make the data saner and cleaner, but it’s definitely a challenge.”
Alec Foege, a contributing editor at Data Informed, is a writer and independent research professional based in Connecticut, and author of the book The Tinkerers: The Amateurs, DIYers, and Inventors Who Make America Great. He can be reached at firstname.lastname@example.org. Follow him on Twitter at @alecfoege.