Overview of the Smart Pricing app

The features of the Smart Pricing app have different requirements. Refer to the following sections for a complete list of requirements for each feature:

• Requirements for implementing pricing markdowns and markups with the Smart Pricing app.
• Requirements for generating price tips for new products with the Smart Pricing app.
• Requirements for creating A/B pricing experiments with the Smart Pricing app.

Role permissions for Smart Pricing

In order to use Smart Pricing app, a staff member must have at least the following role permissions:

• Products > View > View cost
• Products > Create and edit > Edit cost
• Products > Create and edit > Edit price
• All Catalogs permissions
• All Markets permissions
• App permissions to Smart Pricing

Learn more about store permissions for user roles.

Before using the Smart Pricing app, review the following considerations:

• Your store's eligibility determines which types of AI-driven price tips you receive.
• The Smart Pricing app A/B experimentation feature isn't compatible with third-party personalization apps.

Considerations about AI-driven price tips

If you want to implement pricing changes based on AI-powered price tips, then review the following additional considerations:

• When running an A/B pricing experiment, the Smart Pricing app optimizes for profit at the store level, rather than the product level. This means that in a single experiment, some price tips are increases and some are decreases, rather than only increases. Learn more about cross-price elasticity.
• The Smart Pricing app doesn't adjust your product prices in real time for customers based on demand. Insights are presented to you, generating a single stable price to use over time.
• The Smart Pricing app typically generates small adjustments, as opposed to larger price swings.
• Only 1 price tip is generated per product. This means that for products with variants that have different prices (for example, different prices for a small, medium, and large variant sizes of a product), only 1 price tip is generated which applies to all variants during an experiment. You can choose to exclude these products when creating an experiment.
• Price tips aren't generated for different customers or customer segments based on any specific characteristics. Price tips are always generated to apply to your entire customer base and, during an experiment, are randomly assigned to 50% of the traffic.

Using data based on market trends, product conversion rates, and product price history, Smart Pricing generates price tips that you can choose to implement to optimize your product prices to increase store profit. The Smart Pricing app offers the following types of pricing tips:

• Markdowns and markups: These pricing tips are based on your store's inventory and sales, adjusted for seasonality and trends. These price tips can be immediately implemented, with no A/B experiment or trial period required. Learn more about markdowns and markups.
• New products: Tips for products added in the past 30 days are generated based on the public prices of similar products on Shopify. Learn more about new product price tips.
• (Early access) Pricing tips for A/B price experiments: You can create price experiments with AI-driven price tips to help you test and implement product price optimizations. Smart Pricing generates price adjustments and then allows you to run A/B experiments to test the impact of pricing adjustments over a trial period. You can then implement the lessons learned during the experiment to choose the best prices for your products on your online store.

The Smart Pricing models work by learning product demand dynamics from your product performance over time, your product and shop characteristics, as well as broader market trends.

When generating a price tip for markdowns or markups, tips are based on your store's sales and inventory, adjusted for seasonality and product trends. These types of price tips refresh on a weekly basis. Learn more about how price markdowns and markups are generated.

When generating a price tip for new products, tips are based on the public price of similar products on Shopify. These tips are generated at the product level for products that you added in the past 30 days. It might take up to 3 days before you can generate tips for a new product. Learn more about how new product price tips are generated.

When generating a price tip for an A/B experiment, the key data points are the product's sales and conversion rates at different prices over time, focusing on changes in average selling price and units sold. Metrics from other products in your store are also considered. Business category and industry data are important, but less influential to the model. The model isn't trained on non-public price information, geographically localized information, or personally identifiable information (PII) about customers, and Smart Pricing doesn't use such information to generate price tips.

There's no direct benchmarking against other brands or products. The Smart Pricing model takes into account products across multiple categories in order for the model to learn larger market trends more broadly.

New price tips are generated daily until an experiment is created and is actively running. Some products might not have an associated price tip, depending on whether the model has enough information over a sufficient period of time to generate an actionable price tip.

You can ensure that Smart Pricing tips stay within your business pricing rules by setting guardrails for minimum margin and maximum discount, and by applying a price rounding rule.

Guardrails and price rounding rules keep Smart Pricing's tips in a price range and price format that you expect. They also respect your margins, taxes, and fees.

The settings apply to all your Smart Pricing tips. Any existing tips are updated when you change your Smart Pricing settings. The limits that you set take effect anywhere that the app's pricing tips can be viewed and implemented.

You can't apply your Smart Pricing settings to individual products or collections.

Set your Smart Pricing guardrails and price rounding

For your products that have a Cost per item value, you can set a minimum margin for your pricing tips. The default minimum margin is set to 10%.

For any products that don't have a Cost per item value, you can set a maximum discount for your pricing tips. The default maximum discount is set to 50%.

Steps:

1. From your Shopify admin, go to Apps > Shopify Smart Pricing.

2. Click Settings, and then do any of the following:

   • In the Margins section:
     • To set a minimum margin for your pricing tips to follow, enter a percentage value in the Minimum margin field.
     • To set a maximum discount for your pricing tips to follow, enter a percentage value in the Maximum discount field.
   • In the Price rounding section:
     • To keep the decimal value of pricing tips consistent with the existing product price, select Use the decimal value from the current price for all price tips.
     • To use the same specific decimal value for all pricing tips, select Use a set decimal value for all price tips.

3. Click Save.

To learn how individual products will perform at different price points, millions of data points are aggregated and anonymized, and then used in the Smart Pricing model, based on hundreds of factors.

Your app use, feedback, and results help the model make better predictions over time.

Shopify doesn't use personally identifiable information (PII) to train machine learning models for or create price tips in the Smart Pricing app. All data is aggregated and anonymized to ensure no confidential information from either you or your customers or other merchants enters our models. No non-public price information, geographically localized information, or PII about customers is used in our models or to create price tips.

Shopify also doesn't share your confidential, non-public, or proprietary information or data with other merchants.

Learn more about privacy.

You can provide feedback regarding your experience using the Smart Pricing app. Sharing your thoughts is optional, but with your input, the app can grow and improve.

Steps:

1. From your Shopify admin, go to Apps > Shopify Smart Pricing.

2. Click Give feedback.

3. In the Share feedback dialog, include a summary of how Shopify can improve the Smart Pricing app.

4. Optional: If you'd accept being contacted by Shopify about your feedback, then select I'm open to a follow-up conversation about my feedback.

5. Click Share feedback.