Pricing Software Specifications: what retailers require
The specifications for pricing software describe the rules the tool must apply, the constraints it must adhere to, and the scope of stores, channels, and products it covers.
Retailers are now calling for tiered and cumulative rules, margin safeguards, cross-channel price corridors, and alerts regarding promotions and crossed-out prices.
The real deciding factor isn't the number of rules it handles, but how the tool resolves conflicting rules and explains the final price.
Rules and artificial intelligence complement each other: the former set the boundaries, while the latter seeks the best price within those boundaries.
A pricing software specification often looks like a list of features that all vendors check off. And yet, two tools that check the same boxes can produce very different prices.
This article is based on a real-life case: the “configurable pricing rules” section for a multi-country, multi-format retailer, which Booper addressed.
It is intended for pricing, sales, and purchasing departments that are preparing a request for proposals.
What retailers are demanding today, what these demands reveal, and the test that truly sets solutions apart.
What should the specifications for pricing software include?
The specifications for pricing software describe what the tool must be able to do to generate prices that comply with company policy.
It specifies which rules the tool applies, under what constraints, and across which stores, channels, and products.
It is used to compare vendors based on common criteria and then to verify, during a POC, that the selected solution delivers on its promises.
On paper, the task seems simple. In practice, most specifications are similar, and almost all software vendors meet all the requirements.
What sets solutions apart is rarely found in the list of features. It lies in how those features work together when the rules conflict.
What a retailer really needs: a concrete set of specifications
We recently submitted a bid in response to a request for proposals from a multi-country, multi-format retailer. The section on “configurable pricing rules” is about ten lines long.
These lines say a lot about what a pricing team expects from a tool today—and what it has learned from its previous tools. Three categories of requirements emerge from this.
Rules that overlap, not isolated rules
The primary requirement is not simply to “manage rules.” It is to manage multiple hierarchical and cumulativerules: by competitor, by store cluster, by product cluster, by price range, and by product line.
In addition, there are rules that vary by retailer, country, store type, and distribution channel. A single product may therefore be subject to five or six rules at once.
Safeguards Rather Than Formulas
The second category involves constraints: a margin level that must be maintained by supplier, brand, or category; maximum price differences between stores and the website; and rounding that aligns with the retailer’s psychological pricing.
The proposed price is not the result of a single calculation. It is the price that withstands all constraints.
Alerts rather than corrections after the fact
The third category is the most revealing. The tool must be able to determine whether an item is already on sale or will be on sale, and alert the user when a strikethrough price becomes inconsistent because the regular price has changed within a cluster less than 30 days ago.
In other words, the retailer isn't just asking for prices. It's asking to be prevented from publishing a price that it would then have to justify.
The real test: the hierarchy of rules, not their number
All pricing software on the market is capable of applying an alignment rule or a margin floor. The real question is this: what happens when two valid rules result in two different prices?
Pricing in line with the local competitor requires €4.49, the supplier’s minimum margin requires €4.79, and product line consistency prevents us from going below the private label price of €4.59. Which one wins, and who decided?
An explicit hierarchy, or a hierarchy imposed from above
In many tools, the answer depends on the order in which the rules are entered or on a technical setting that no one ever checks. The hierarchy exists, but it was never formally established.
Over the years, exceptions accumulate and the engine becomes unreadable. This is what we call the "rule debt" of a pricing engine.
A final price that we can explain
Based on our experience with numerous projects in mass retail and specialty retail, we are convinced that a good rules engine is judged by its ability to explain why a price was set at that level.
Which rule came into play, which one was set aside, and what constraint limited the outcome? A buyer or store manager who doesn't understand a price will eventually set it by hand.
In a set of specifications, this requirement is worth more than ten additional features. It should be verified through a demonstration using your own conflict scenarios, not those provided by the vendor.
Consistency Across Channels, Stores, and Product Lines
Rules based on store, country, or channel reflect a reality: competition isn't the same everywhere. A price difference between two retail locations isn't a mistake in and of itself.
The risk lies elsewhere: inconsistencies—which no longer follow any logical pattern—between the store and the website, or between two formats within the same product line.
That is the purpose of the price corridor: a range, set in advance, within which each local price or channel can fluctuate. If prices go beyond that range, the tool issues an alert instead of letting it pass.
We explained this reasoning in detail in our article on price differences across channels: consistency does not mean uniformity.
Product line consistency also requires knowing which products correspond to one another—both in your own lineup and among your competitors. Without reliable product matching, an alignment rule will result in incorrect comparisons.
A thorough set of specifications addresses this, and it is often a feature that we discover too late. Product chaining extends this approach to the formats and variants within the same product line.
Strikethrough prices and promotions: Compliance is now part of the engine
The requirement to provide a price comparison for crossed-out prices is by no means a minor detail. Since 2022, any advertisement for a price reduction must refer to the lowest price charged in the preceding 30 days.
A permanent price reduction at a single group of stores is therefore enough to undermine a promotion that was planned weeks in advance.
One in three businesses advertising price reductions was found to be in violation during the DGCCRF survey, which covered nearly 5,300 businesses and 350 websites.
(DGCCRF, 2024 survey on consumer information regarding prices and price reductions; report published on November 24, 2025)
Retailers have drawn a logical conclusion from this: checks must be performed where prices are calculated, not in a verification file at the end of the process.
In a separate article, we described how to manage discount ads using a pricing tool.
The same logic applies to current and upcoming promotions. A permanent price that is recalculated during a promotion—or just before it—can disrupt the promotional strategy and confuse the price perception for key products.
Rules or AI: A False Dilemma in the Specifications
The specifications we received also call for “incorporating elasticity rules.” The phrasing is telling: the company doesn’t want to choose between rules and artificial intelligence.
The rules define the strategy and constraints. Theprice elasticity and cross-elasticity models indicate, within these limits, which price yields the highest return.
Software that offers one feature but not the other forces users to choose between control and performance.
What Specifications Often Omit
Functional requirements make up the bulk of the document. However, three factors are far more often decisive for the project’s success than just one additional feature.
Data first: a rules engine is only as good as the quality of the data it receives. Incorrectly linked references or incomplete cost data skew every rule.
Next, the proof: a demonstration using the vendor's data proves nothing. A proof of concept (POC) within your own scope tests the rules against your actual conflicts.
Finally, the exit strategy: what you’ll get if you switch providers, including the terms and conditions. It’s best to know this before you sign.
To understand how the requirements specification fits into the overall project—from identifying the need to going live—see our guide to selecting and deploying a pricing tool.
How Booper Meets These Requirements
On the Booper platform, pricing rules (target, floor, ceiling) may vary from one retail location to another, with an alert triggered whenever a local price falls outside its range.
With Pricing Analytics, the pricing policy becomes a set of written and organized rules that the platform checks against each product listing before proposing a price.
Business rules are accompanied by validation workflows: every proposed price is reviewed and approved by the pricing team before being published.
AI models calculate simple and cross-price elasticities as well as cannibalization, and then simulate the impact of a price change on revenue, margin, and price perception before any rollout.
Product matching, cloning, and chaining link your SKUs to those of competitors and to each other, ensuring that alignment and product line rules are reliable.
Promotions are managed on the same platform, which prevents a recalculated regular price from disrupting an ongoing promotion.
Among its clients who have switched to continuous price management, Booper has observed a margin increase of +0.5 to +3 points within a few months.
Do your pricing rules hold up in the face of your real challenges?
Our experts compare your specifications with your actual cases and show you how each final price is calculated and explained.
Let's discuss your requirementsFAQ: Specifications for Pricing Software
The scope (stores, countries, channels, categories), pricing rules and their order of priority, margin constraints, consistency across channels and within product lines, and alerts regarding promotions and strikethrough prices.
Include the available data, the procedures for price approval, and the release conditions. It is most helpful to include a few real-world examples where two rules conflict, to see how each publisher resolves them.
This is the part of pricing software that calculates a price based on rules set by the company: alignment with a competitor, minimum margin, minimum and maximum prices, permitted price variations between stores or channels, and rounding.
A good rules engine handles multiple rules at once, applies an explicit hierarchy when they conflict, and explains which rule determined the final price. Without this traceability, teams end up setting prices manually.
Compare solutions based on your own specific scenarios rather than on their list of features: conflicts between rules, product line consistency, discrepancies between in-store and online prices, and current promotions. Ask to see how the final price is calculated.
Next, check the ability to combine rules and elasticity models, the quality of product matching, and reversibility. Our comparison of retail pricing software puts the leading solutions to the test.
Rule-based software applies guidelines set by the pricing team: align prices, maintain a margin, and stay within a range. It is predictable but does not indicate which price generates the most revenue.
AI-powered optimization software estimates price elasticity, cannibalization, and the impact on margins to recommend a price.
The two approaches complement each other: the rules set the boundaries and the strategy, while the AI seeks the best price within those boundaries.
Start with a problem statement rather than a list of features, then draft a brief requirements document focused on your rules, constraints, and data. Shortlist three or four software vendors.
Have them work on the same set of real-world scenarios, then test the chosen solution on a limited scale before rolling it out more broadly. A proof of concept using your own data is worth more than a written response, no matter how comprehensive it may be.
Since 2022, any discount offer must be calculated based on the lowest price charged in the preceding 30 days, in accordance with the European “Omnibus” Directive.
If the regular price drops at a group of stores shortly before a promotion, the planned crossed-out price may become misleading. Software that detects this situation during the calculation prevents the publication of a discount that cannot be justified during an audit.
A price corridor is a predefined range within which a price may vary depending on the store, region, or channel. It is often expressed as a maximum price difference, for example, between a store and an online retailer.
It provides flexibility to respond to local competition while avoiding discrepancies that customers might find inconsistent. The software issues an alert as soon as a price falls outside the range.
Pricing for sporting goods involves setting, for each SKU, size, and store, the price that will clear out a seasonal collection before the next one arrives. The year’s profit margin is determined in the final weeks of each season, when a decision must be made between maintaining the margin and clearing out inventory.
Marking down an entire product line offers discounts on sizes that are still selling; the bike market is driven by model year, and the brand stands out from the major brands. The secondhand market and the end of the destruction of unsold inventory make this the right time to mark down prices.
The price of a high-tech product declines as it ages: held steady at launch, it drops in stages upon the announcement of its successor, then weighs on inventory that loses value each week. With operating margins in the 2% range, an unnecessary 1% drop wipes out half of the profit.
Constantly matching the lowest price is tantamount to letting your competitors set your prices. Profit margins are rebuilt through the product bundle, accessories, and services, and are maintained in the face of refurbished products, which cap the price of new products from the previous generation.
The price of auto parts is determined by a vast catalog, where the same part is available as an OEM part, an aftermarket part, or a compatible part, with part numbers that vary from one website to another. Without a reliable way to compare equivalents, any price discrepancy may be inaccurate.
The customer compares a short list of products—tires, batteries, oil, and wiper blades—which define the price image. The technical long tail is primarily about availability. Aligning it with the lowest price offers discounts that no one asked for.