High-Frequency Pricing at Scale for E-Commerce
Mirrored from arXiv — Machine Learning for archival readability. Support the source by reading on the original site.
Computer Science > Machine Learning
Title:High-Frequency Pricing at Scale for E-Commerce
Abstract:This paper presents the design, development, and implementation of a specialized forecast-then-optimize algorithmic pricing tool for sales campaigns in fashion e-commerce. Sales events present unique challenges for pricing including volatile demand patterns, rapid pricing decisions, and the need to balance short-term revenue with long-term profitability. We describe our approach combining daily-resolution demand forecasting using gradient-boosted trees with a multi-objective optimization framework that maximizes both long-term profit and net merchandise value for more than 5 million articles. Our solution addresses key limitations of existing weekly-granularity systems by implementing a forecast-then-optimize architecture that reduces pricing decision time from hours to minutes. We validate our approach through 23 A/B tests across 12 markets during 2023-2024 sales campaigns at Zalando, one of Europe's leading online fashion retailers. Experimental results demonstrate that the new pricing system achieves approximately 6% higher profit while maintaining equivalent performance on sales and revenue compared to the previous manual-algorithmic hybrid approach. Based on these results, the algorithm was successfully deployed to production and now handles the majority of algorithmic pricing decisions for sales campaigns at the company.
| Subjects: | Machine Learning (cs.LG) |
| Cite as: | arXiv:2606.13741 [cs.LG] |
| (or arXiv:2606.13741v1 [cs.LG] for this version) | |
| https://doi.org/10.48550/arXiv.2606.13741
arXiv-issued DOI via DataCite
|
Access Paper:
- View PDF
- HTML (experimental)
- TeX Source
References & Citations
Bookmark
Bibliographic and Citation Tools
Code, Data and Media Associated with this Article
Demos
Recommenders and Search Tools
arXivLabs: experimental projects with community collaborators
arXivLabs is a framework that allows collaborators to develop and share new arXiv features directly on our website.
Both individuals and organizations that work with arXivLabs have embraced and accepted our values of openness, community, excellence, and user data privacy. arXiv is committed to these values and only works with partners that adhere to them.
Have an idea for a project that will add value for arXiv's community? Learn more about arXivLabs.
More from arXiv — Machine Learning
-
Representation as a Bottleneck for Mechanistic Interpretability: The Manifestation Unit Protocol
Jul 2
-
SNAP-FM: Sparse Nonlinear Accelerated Projection for Physics-Constrained Generative Modeling
Jul 2
-
SemiScope: Disentangling Classifier Tuning and Joint Optimization in Semi-Supervised Security Classification
Jul 2
-
A Filtered Mixture-of-Generators for Fully Synthetic Survival Training
Jul 2
Discussion (0)
Sign in to join the discussion. Free account, 30 seconds — email code or GitHub.
Sign in →No comments yet. Sign in and be the first to say something.