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This Software Company Wants to Help Retailers Compete Against Amazon An engineer gives retailers a fighting chance in the online price wars.

By Joe Lindsey

Opinions expressed by Entrepreneur contributors are their own.

The next few years are going to be a time of massive growth for online retail, driven by customers' ability to easily find which store has the lowest price for any given item. The problem, according to Guru Hariharan: Most retailers aren't prepared for this new world. "There's going to be a gun fight happening, but a lot of big retailers still only have knives," says the founder of analytics and pricing specialist Boomerang Commerce.

Hariharan speaks from experience. He spent nearly six years in engineering and business management roles at Amazon, where he grew to appreciate the power of analytics for building and scaling e-commerce businesses. He also saw how Amazon used pricing as a key lever to maximize sales, profits or whatever model the company chose to focus on. When Hariharan left, seeing the gap between Amazon's tools and those of other retailers—even those of big brands—was "mind-boggling," he says.

Sunnyvale, Calif.-based Boomerang is looking to bridge that gap with its main software service, Dynamic Price Optimizer. The service starts by analyzing pricing data from a retail client and its competitors. But the secret sauce is its proprietary algorithms, which incorporate sophisticated game theory and portfolio theory models, filtering the data for almost any variable or desired outcome. Boomerang uses A/B test modeling to simulate sales outcomes of various price strategies for a client's products. It can fine-tune a selection by analyzing the most profitable or highest-volume SKUs in a segment, even those not carried by the client retailer.

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