Dive Brief:

• Groupon has renewed its subscription to Boomerang Commerce's retail Price Performance Management application, which makes pricing recommendations on products and services based on consumer demand and a variety of other factors, according to a company press release.

• Groupon is now using the application for the second year to make pricing recommendations based not only on external factors like consumer demand, market elasticity and competitive pricing, but also internal factors, such as traffic, deal profiles and sell-through targets.

• Boomerang’s PPM dashboards allow Groupon to measure performance, compare results and assess pricing health. The tools also inform offer-pricing strategies that can drive conversions on its e-commerce website.

Dive Insight:

Retailers and brands are increasingly turning to optimization tools like Boomerang and Revionics as they deal with changing marketplaces. Considering how easy it is now for customers to conduct price comparisons even while in-store on their mobile phones, it makes sense for sellers to be willing to be more dynamic about how they set prices.

It is also something they need to be open to doing in order to stand a chance against Amazon's dynamic pricing. But, it should come as no surprise that Boomerang has found a way to do this, given its CEO, Guru Hariharam, used to work for Amazon, co-founding one of the company's cloud businesses and establishing Amazon's first self-service B2B marketing channel.

In a sense, Boomerang is shopping a concept that a few retailers already understand and have pursued in a different way by opening off-price stores. Nordstrom Rack is one example. This sort of concept is a low-tech cousin to Boomerang's automated approach, but it's trying to accomplish some of the same things.

Some retailers still may not get it, but Groupon seemed to understand the advantages of pricing to perform fairly early on, as its relationship with Boomerang goes back to the technology provider's earliest days. It seems to need the help, too. Groupon has been widely observed to be making progress on a corporate turnaround, though the news of the Boomerang renewal did come the same day that Groupon confirmed it laid off about 130 employees.