{"id":7689,"date":"2015-12-10T16:16:43","date_gmt":"2015-12-10T21:16:43","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/paribus-seamlessly-retrieving-the-stores-owe\/"},"modified":"2015-12-14T14:00:50","modified_gmt":"2015-12-14T19:00:50","slug":"paribus-reclaiming-that-stores-owe-you","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/paribus-reclaiming-that-stores-owe-you\/","title":{"rendered":"PARIBUS \u2014 reclaiming $$$ that stores owe YOU."},"content":{"rendered":"<p><a href=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/Tech-and-Ops-Strategy.pdf\">3-Part Alignment<\/a>\u00a0&lt;&#8212;-Please click on link to see visual.<\/p>\n<div style=\"width: 640px;\" class=\"wp-video\"><video class=\"wp-video-shortcode\" id=\"video-7689-1\" width=\"640\" height=\"360\" preload=\"metadata\" controls=\"controls\"><source type=\"video\/mp4\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Paribus-Get-Money-Back-When-Price-Drop-Effortlessly.mp4?_=1\" \/><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Paribus-Get-Money-Back-When-Price-Drop-Effortlessly.mp4\">https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Paribus-Get-Money-Back-When-Price-Drop-Effortlessly.mp4<\/a><\/video><\/div>\n<p>&nbsp;<\/p>\n<p><strong style=\"line-height: 1.5\">INTRODUCTION<\/strong><\/p>\n<p><em>&#8220;Dynamic pricing can make it hard for online shoppers to know if they\u2019re getting the best price \u2013 Amazon makes over 80 million price changes per day \u2013but retailers often offer price match guarantees.&#8221;\u00a0<\/em>[1]<\/p>\n<p>Well, here comes PARIBUS. PARIBUS is an automated plugin that connects to users\u2019 email, reviews online purchase receipts, and files for price readjustment claims on behalf of the users\u2014the\u00a0<em>very<\/em>\u00a0instant that the price drop occurs across participating retail and outlet stores. [2]<\/p>\n<p>Colloquially put, if I purchase a couch for $500 from Amazon.com on December 21, 2015\u2014and if Amazon.com then discounts that price to $400 a month later, Paribus automatically reimburses a portion of that\u00a0\u201clost\u201d $100 directly to the purchaser.<\/p>\n<p>PARIBUS\u2019s objective is to capitalize on the emerging trend of consumers making a greater proportion of their purchases online. As PARIBUS says it, \u201cStores owe you money; We\u2019re gonna get it for you.&#8221;<em>\u00a0<\/em>\u00a0[3]<\/p>\n<p><strong>BUSINESS MODEL<\/strong><\/p>\n<p><strong>Value Creation<\/strong><\/p>\n<p>PARIBUS has successfully implemented and leveraged five\u00a0of the value creation levers: Focus, Efficiency, Differentiation, Scale, and Network Effects.<\/p>\n<ul>\n<li><u>Focus &amp; Differentiation<\/u>: PARIBUS has distinguished\u00a0itself in the marketplace by employing rigorous algorithmic models that measures the frequency and magnitude\u00a0of price movements across product types at some of the largest Internet retailers in the United States.<\/li>\n<li><u>Scale<\/u>: During a phone interview with Co-founder Eric Glyman, he said,\u00a0&#8220;What I can say is that we are already saving our consumers millions per year, are already tracking hundreds of millions in annual purchases, and have increased our size from several hundred in May to a number more than 100x larger within 6 months.&#8221; The more retailers that partner with PARIBUS inherently increases the number of opportunities that\u00a0PARIBUS has to grant its consumers instantaneous discount savings.<\/li>\n<li><u>Efficiency<\/u>: PARIBUS offers consumers a no hassle, easy-step, one-time signup opportunity. Thereafter, the efficiency of the service is self-evident. Namely, PARIBUS (1) automatically filters through individual&#8217;s online purchases via their email account; (2) scavenges the retailers&#8217; websites to detect instantaneous discount postings (i.e., price reductions); (3) automatically processes\u00a0the discount rebate form on behalf of the consumer; and (4) directly deposits a significant percentage of that discount into the PARIBUS user&#8217;s account.<\/li>\n<li><u>Network Effects<\/u>: PARIBUS is already supported by a number of large, well-recognized firms. The array of available merchants affords consumers the opportunity to leverage the PARIBUS service across an interrelated network of stores that their current consumer base already spends a significant portion of its disposable income.<\/li>\n<\/ul>\n<p>After speaking with other PARIBUS employees, it&#8217;s clear that the elements of the\u00a0value creation proposition they feel\u00a0will be most attractive to customers are: a) (i) functional (Has this service performed its job as I expected?); (ii) economical (Have I saved money because of it?); and (iii) social (Does this service generate networks within and\/or across consumers and retailers?).<\/p>\n<p><strong>Value Capture &amp; Sharing<\/strong><\/p>\n<p>PARIBUS&#8217; pricing model is simple.<\/p>\n<ul>\n<li>PARIBUS retains 25% of the total discount rebate they are retrieved from a consumer&#8217;s purchase<\/li>\n<li>PARIBUS also engages in a form of outcome-based pricing: If PARIBUS user A has non-PARIBUS user B, PARIBUS will reduce the the % margin that they retain from PARIBUS user A for each discount rebate retrieved<\/li>\n<\/ul>\n<p><strong>OPERATING MODEL\u00a0<\/strong><\/p>\n<p>The operating model is broken down into three components:<\/p>\n<ul>\n<li><u>Structure:\u00a0<\/u>\u00a0PARIBUS is an automated plugin &#8220;which connects to users&#8217; email, scans their online purchase receipts, and files price adjustments claims.&#8221; \u00a0Users can sign up via their mailbox, which &#8220;works with most email providers&#8221; (e.g., Gmail, Outlook, etc.), and the &#8220;plugin allows them to claim money back from various retailers. \u00a0PARIBUS price matches &#8220;20 etailers including Amazon, Best Buy,Walmart, Target, and Macy&#8217;s.&#8221; [5] In terms of organization, Co-founder Gylman describes it as centralized and non-hierarchical, wherein each member of the team&#8211;be it the Co-founders, front- and back-end developers, marketing director, etc.&#8211;are all encouraged to voice their innovative ideas. \u00a0This core team operates out of a small office building in Brooklyn, NY. \u00a0The decentralized portion of their organization lies in various countries overseas, where it is easier to source low-cost data storage and analytics projects<\/li>\n<li><u>Processes:<\/u>\u00a0Because PARIBUS does not yet produce physical goods, their reliance on external manufacturers is minimal. And given that only a small fraction of their organization is decentralized from their Brooklyn hub, supply chain management has yet to pose any serious cost-related challenges. The key process-related advantage centers around innovation: helping users attract the best deals\u00a0<em>after<\/em>\u00a0their purchases. &#8220;Instead of acting as a search engine through which users can find best prices, or provide users with coupons, [PARIBUS] backtracks all of their users purchases. The process-related\u00a0<em>secret sauce<\/em>, if you will, is that PARIBUS uses the same\u00a0retailer software approaches that produce variable price changes at the stores. \u00a0Lastly, on the service front, PARIBUS is quite &#8220;behind-the-scenes&#8221;&#8211;think about us, says Co-founder Glyman, as &#8220;the housekeeper who cleans your room while\u00a0you&#8217;re\u00a0out and leaves your lost\u00a0dollar bill on your counter for when you return.&#8221;<\/li>\n<li><u>Assets &amp; Capabilities:<\/u>\u00a0As discussed above, PARIBUS relies on sophisticated data and security tools. On the data front, co-investor Jenny Xia (who was also kind enough to let me interview her) describes PARIBUS&#8217;s three-pronged IP protection safeguards: &#8220;First, we have a &#8220;web scraper&#8221; that quickly analyzes data to determine requisite rebate eligibility, depending on the time of purchase and store location. Second, we use a &#8220;natural language processor&#8221; that interprets the various jargon used by different rebate forms and identifies which phrases functionally hold the same meaning.&#8221; \u00a0On the security front, PARIBUS faced initial pushback from consumers against allowing PARIBUS to access their email accounts. In response, PARIBUS incorporated cutting-edge security systems into their plug-in, and the firm also consulted with highly reputable security experts who advised the team on how to limit the scope of PARIBUS&#8217;s access to only information directly pertaining to the online purchase.<\/li>\n<\/ul>\n<p><strong>ALIGNMENT<\/strong><\/p>\n<p>Ultimately, PARIBUS has aligned its business and operating models to capitalize upon the ubiquitous price manipulations affecting\u00a0online purchases, which &#8220;are a seemingly everyday occurrence&#8221; in the &#8220;rise of the digital age.&#8221; [6]<\/p>\n<p>Paribus has leveraged the constantly changing prices at online retail stores to established a fixed discount-sharing system that benefits both the firm and its consumers. The inherent benefit of cost savings, coupled with the outcomes-based referral program (described above) bolsters key elements of their value creation levels&#8211;namely, scale and differentiation. For example, the referral program benefits enable them to enhance user-relate scale volumes, and their first-to-market automatic discount capture pricing scheme differentiates them from any existing competition.<\/p>\n<p>Additionally, PARIBUS has leveraged its IP technologies, innovative product, and centralized, tight-knit organizational structure to shield itself from potential competition who might otherwise try to undercut PARIBUS&#8217;s value creation by stealing\u00a0its user base scale share or by merely reducing it&#8217;s 25% rebate-sharing value capture model. \u00a0And perhaps what&#8217;s most ingenious of all about the firm&#8217;s alignment is that PARIBUS&#8217;s value-add features and &#8220;post-purchase savings&#8221;\u00a0approach differentiates the organization &#8220;from other players who aim to save consumers money on their purchases.&#8221; \u00a0Put simply, PARIBUS &#8220;uses the very same advanced data structures and algorithms that retailers use to distort prices.&#8221; [8] Whereas PARIBUS, one the other hand, aims to be the digital champion of consumers&#8211;like us&#8211;who lack the time or will-power to discover discounts before pushing the &#8220;BUY&#8221; button.<\/p>\n<p><span style=\"text-decoration: underline\">Works Cited<\/span><\/p>\n<p>[1]\u00a0http:\/\/trendwatching.com\/trends\/5-trends-for-2016\/<\/p>\n<p>[2] Most major online retailers legally guarantee consumers that they are eligible for many discount-related savings that occur after the initial purchase date.<\/p>\n<p>[3]\u00a0https:\/\/paribus.co\/<\/p>\n<p>[4] https:\/\/paribus.co\/<\/p>\n<p>[5]\u00a0http:\/\/trendwatching.com\/trends\/15-innovations-from-2015\/<\/p>\n<p>[6]\u00a0http:\/\/www.investopedia.com\/articles\/investing\/103015\/how-does-paribus-work-and-make-money.asp[6]<\/p>\n<p>[7] http:\/\/www.investopedia.com\/articles\/investing\/103015\/how-does-paribus-work-and-make-money.as7<\/p>\n<p>[8] \u00a0http:\/\/www.investopedia.com\/articles\/investing\/103015\/how-does-paribus-work-and-make-money.asp<\/p>\n<p><span style=\"text-decoration: underline\">Other References\u00a0<\/span><\/p>\n<p>[A] http:\/\/abcnews.go.com\/GMA\/video\/holiday-shopping-bills-empty-bank-account-35409734<\/p>\n<p>[B]\u00a0http:\/\/abcnews.go.com\/WNT\/video\/tips-biggest-thanksgiving-shopping-bargains-35422901<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Retrieve the money that stores owe you! No hassle, no paper work, just cash.<\/p>\n","protected":false},"author":694,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[9,4,6,5,8,1],"class_list":["post-7689","hck-submission","type-hck-submission","status-publish","hentry","category-airlines","category-effective","category-gold","category-mining","category-uber","category-uncategorized"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>PARIBUS \u2014 reclaiming $$$ that stores owe YOU. - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/paribus-reclaiming-that-stores-owe-you\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"PARIBUS \u2014 reclaiming $$$ that stores owe YOU. - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Retrieve the money that stores owe you! 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