The Objective was to launch a new tool that will enable suppliers to decrease their product’s prices (both Meesho & Wrong/Defective Return Price) without having to raise a support ticket.
Existing Setup: When a supplier wants to increase/decrease the price on his products then they have to reach out to our supplier support team, create a ticket and wait for 7-10 days for the product’s prices to be updated.
As a result of this tedious process, we have unintentionally shaped a undesired behaviours where suppliers are (i) reluctant to (or experiment with) reducing prices (Price Reco Tool) (ii) adding an extra buffer to their prices (old suppliers - post awareness of this process), both of which are leading to increased prices in our platform.
Additionally, expected by easing suppliers of this tedious problem, our supplier support tickets would also reduce
Long Term vision for the feature
Our vision here was to have a capability where suppliers can increase/decrease (control) their prices anytime at ease (easier than current process) and drive price drop in platform, while simultaneously ensuring that the suppliers don’t misuse/abuse it, primarily by shaping their behaviour with incentives & penalties and secondarily by adding guardrails.
As we have established the problem statement, we will now go through the data backed Insights & Findings from supplier callings and surveys used to
1. Suppliers Reluctant to (or experiment with) reducing prices:
When we attempted to understand why suppliers weren’t accepting price recos today. Our research highlighted that suppliers don’t accept price recos because they can’t increase later / Don’t know how to change it later (80%+ responses)
2. Suppliers adding an extra buffer to their prices:
Since this behaviour would largely impact the price of any new listing of an existing supplier, the same can be examined to validate the existence of this. The following data shows UPD trends of PIDs uploaded by existing suppliers (who have traded on Meesho and understand our customer base and platform in depth). By focusing on new PIDs of existing suppliers we are trying to remove impact of factors generally learnt by selling over time (e.g. % RTO, payment cycles, etc.). What we see is that there is a gap in UPD for new PIDs even for existing suppliers indicating that suppliers are attempting to keep buffers at listing and ladder down prices over time -
We deep dived on reasons behind this behavior and through supplier calls and surveys we reconfirmed that this is primarily due to lack of price control.
3. Why do suppliers need to modify prices ?
Through support tickets we identified 2 key things -
(i) suppliers use price control not just to increase prices but also to decrease prices (~40% of support tickets suppliers are to reduce prices)
(ii) given this applies to ~8-9% of tickets we acquire additional costs in terms of bandwidth to support the same
The overall objective was to decrease prices in the platform, hence the primary metrics will be platform price drop. Since, the product’s price can be decreased (and, not increase) at ease, we will have check if this encourages supplier’s to increase their buffers, also the product can potentially impact the Inventory tab’s (other touch points tab) user experience and hence, it will make our check metrics.