Spotlight on NTT DATA: Gloria Garattini Unveils Innovative Pricing Strategies
Luca Lisci: Gloria, how would you like to be introduced in this interview?
Gloria Garattini: My academic journey led me to a degree in mathematics, a field that I view as the philosophy of sciences. It’s not just a rational discipline; it’s a field that stimulates reasoning and curiosity. The most valuable takeaway for me, more than any specific knowledge, has been the ability to tackle situations and problems confidently and methodically. This capability is truly what I’ve gained most from my studies. I am inherently curious and driven by enthusiasm. One distinctive trait about me is my wholehearted commitment to whatever I pursue. I allow myself to be completely swept up by this enthusiasm, which I believe not only defines me but is also very often recognized by others, I may say.
Luca Lisci: Can you tell us a bit about your team at NTT DATA and what you’re currently working on?
Gloria Garattini: I joined the NTT Pricing Team in 2018 during a particularly challenging period, both in terms of team dynamics and other work-related issues. I entered with great enthusiasm and a strong desire to understand and improve things. I found myself managing the team almost naturally.
It’s a very cohesive and energetic group; it feels like I’ve shaped it in my own image. They are all incredibly positive people who love challenges, and even those who are initially resistant eventually dive in with full enthusiasm. We tackle the typical challenges of this market, which is dominated by inflation and uncertainty, where pricing currently acts as the critical interface between the consumer and the retailer.
The right price has an incredible leverage on consumers, especially now when there’s heightened price sensitivity due to the overall economic situation. This fact is cross-sector, from grocery to fashion, to travel, etc.
During the COVID era, the main concern was obtaining goods, regardless of pricing. Now, consumers are more price-conscious, and retailers are often judged based on their pricing strategies, unlike before when the focus might have been more on the range of products, assortment, or quality. As a consumer myself, I notice that I am more attentive to prices, which wasn’t the case before.
As my experience told me, It’s not just about having a great technology but also about making it useful. And what better place to apply it than in pricing, which is receiving a lot of focus right now. Moreover, being part of NTT, a technology leader, gives us access to all the necessary know-how. For me, being able to harness technology to serve our clients was a pivotal moment.
Luca Lisci: Could you update us on the status of this project? Let me preface this by saying I am aware that it is a collaborative effort between the Decision Science Alliance and your team. I understand from attending one of your meetings that it is a project of significant ambition, yet it maintains a strong sense of coherence and practicality. What can you tell us about it?
Gloria Garattini: As you rightly mentioned, it is an extremely complex and, I proudly add, very challenging project. The field of optimization has long been discussed in the context of pricing, and vendors have developed and proposed some tools over time in various sectors, starting from the airlines. We want to introduce a novel and effective tool that specifically meets the needs of customers in different B2C markets. The Keywords we put at the center of the development of our product are dynamic and contextualized pricing. Contextualization means that the pricing algorithms must be as aware as possible of the market conditions, the consumer’s behavior, and what will happen (prediction-based pricing).
We also consider the needs of a customer needing a near-real time pricing such as in many retailers selling finite-capacity products over the web.
We lever, from one side, the experience acquired over the years and, on the other, the enormous opportunity provided by the evolution we are living through in terms of technologies, methodologies, and consumer contexts. I believe an innovative push is reflected in several aspects. Firstly, it’s important to always keep in mind our goal with respect to the retailers, that is, helping them in an effective market positioning. So, it’s not just about having data and analyzing it, but, first of all, the tool and the underlying methodology must favor the customer in ensuring that the pricing is aligned with the market strategy.
Often, the pricing is managed by users, mainly focusing on achieving the short-term goals of their specific category, but it’s rare to see an integrated process where operation and strategy are integrated and supported by a decision support system. Hence, we provide different pricing perspectives from which different users cooperate in a coherent view. Such a view is built around the models of demand and consumer behavior.
We planned to offer within the product a novel, ai-based, virtual assistant to help users in deep data analysis and early interception of phenomena.
The retail market is rich in data; it’s as if it speaks through these data. However, because there is so much data, it’s essential to guide users through exploring it and focusing on what matters for the specific user at the particular moment.
It’s not about selling a product but about helping our clients utilize the product optimally. So, we also created a project deploy model to make it easier for our customers to introduce the pricing coherently with their maturity. The project delivery is a step-by-step approach, where our pricing consultants team works closely with the client, starting from insights to the available data.
Indeed, NTT has a strong tradition of consultancy, and developing products is one of the pillars NTT has set for itself up to 2025. Thanks to our extensive experience across numerous sectors, we support the user with both the product and consultancy services.
We serve the client comprehensively, from setting up the project to offering application maintenance services. We never leave them unsupported. And I believe that this is one of our strengths.
Luca Lisci: We’ve definitely hit the mark. I understand that this is exactly the issue the market needs to solve.
Gloria Garattini: That’s right, and this includes having a model for easy deployment with incremental steps. Essentially, I grow alongside the user. There’s a general issue in the retail world, which Gartner has discussed in all its annual reports. It concerns assessing the maturity level of the client. Just as we discussed technology and user needs earlier, you must also consider where the client stands in terms of maturity. We mustn’t forget that Excel is still a tool in pricing. Starting with a user who uses Excel and then suddenly switching to an optimizer can be jarring—we want our clients to understand what they are doing. Gone are the days of the optimizer as a black box, where I give you data, and you tell me the price for each product.
We want to ensure that through a series of insights and data analyses, which include conventional data like seasonality and simple data, to more complex analyses such as cross-product relationships and cannibalization, our clients gain a comprehensive understanding of their business.
Luca Lisci: I read this approach as “productizing consultancy and consulting the product.” An incredibly powerful perspective to me.
Gloria Garattini: Yes, it is indeed. Let’s not forget that this product originated in Italy, amidst all the complexities of a challenging local market, such as the promotion aspect, yet it undoubtedly aspires for global distribution.
Luca Lisci: Can you share some of the milestones from the product’s roadmap?
Gloria Garattini: Some aspects will be presented at the Decision Science Alliance Summer Summit in Valencia on June 6 and 7, where we will begin to share some insights that contribute to understanding the optimizer and absolutely provide a connection between the pricer’s role, such as the category manager, and the broader corporate strategy. This is a bit of coordination, let’s say, between those who are focused on their specific areas and those who have a much broader vision of the corporate project and the corporate strategy.
Luca Lisci: I really like what you’re saying about having different types of users on the platform because it means this product also has a strategic breadth. It’s not just a tactical matter of pricing but also strategic when it starts interacting with various corporate stakeholders. It sounds like it truly becomes a corporate companion, doesn’t it?
Gloria Garattini: You understand that when I say the right price is the interface between the consumer and the retailer, it can’t just stop at the level of the pricer, but must necessarily involve the entire business process. This is something that is somewhat overlooked today, I must say.
Luca Lisci: Absolutely overlooked. I think it’s also important because it provides a significant answer to retail companies about this issue. Now, if you were to describe the biggest challenge you are currently facing or expect to encounter along the way, what would it be, strategically speaking?
Gloria Garattini: To the experts in the field, an optimization process starts with modeling the demand for products. One of the biggest challenges we are facing is certainly how to model demand based on consumer buying behavior. We are truly modeling demand based on how the consumer moves and how they make their purchases while definitely taking into account simple elements like seasonality or more complex ones like the mutual influence of products, including cannibalization or driving the purchase of one item due to another, like buying a hamburger and then likely adding a bun and possibly sauces to the cart. Promotions and markdowns also require approval to be modeled appropriately.
So, we are analyzing from the consumer’s perspective, which is definitely an innovative element. Another very important challenge, which we have never lost focus on, is the computational problems and performance issues. You understand that when processing millions of data points, performance becomes critical. I must say that from the beginning, we have always focused on this point. So, nothing was ever done just to see what happens, but we tackled it right from the start, which is typically not the approach. Driven by the need to achieve results, we calibrated our efforts, thanks also to the support of some external experts from the Decision Science Alliance and their extensive experience, always keeping computational efficiency as a guiding light.
Moreover, another challenge: today we are big experts in the food retail world. When designing this product, we didn’t limit ourselves to this market. We made it as configurable as possible so that tomorrow we can take on the world of fashion, or very different kind of business, like the typical purchase of a cabin on a cruise ship, for example. We are looking at everything that involves a consumer and a seller, whether it’s a product or a service.
Luca Lisci: Very interesting. Gloria, in light of our discussion today, is there anything particular about this experience, this journey you are on, that you’d like to highlight for our audience?
Gloria Garattini: I was just thinking that… Well, this is just the first big step of all that we see on the horizon. It’s like the more we delve into it, the hungrier we get. We start by looking at certain data, then begin to think about… We’re talking about contextualized real-time pricing, which Gartner predicts will dominate in the coming years. So, the idea of using mobile devices as a mode of communication between the retailer and the user is something we’re really considering in the most forward-thinking way possible. I am very excited about this broad and futuristic vision.
Additionally, I must say that having the backing of a multinational like NTT, which really focuses on products and offers us a wealth of knowledge both technologically and from an experiential standpoint, truly makes me feel very secure, as the saying goes. I’ve never felt out of my depth. I feel like I have strong support. DSA provides the expertise and experience we need and this desire to always look beyond—because that’s what you expect from research, and that’s the beauty of it. All of this, coupled with a background that makes me strong and capable of facing challenges, makes me think, who could be better off than me?