More than ever, savvy retailers need to turn to science-based pricing and promotions to avoid irreparable missteps with their shoppers.
Retail Week recently released their latest retail insight, “Priceless: How AI will win the retail pricing war.” This report, produced in collaboration with DemandTec, explores the current retail landscape in Europe and investigates how uncertainty surrounding Brexit, a market ravaged by the impact of the pandemic have had on shoppers.
The report cites data from a recent global shopper survey that confirms how critical demand-sensitive pricing capabilities are as the pandemic drags on. Shoppers report reduced income and shaky confidence in their future economic status. More shoppers rank price as the key contributor to a positive (or negative) shopping experience than any other single factor. And shoppers cite a growing preference for private-label products in their quest for great value and quality.
After nearly a year of shopping online in unprecedented numbers, shoppers across the board – from Generation X to millennials to baby boomers – confirm that even after the pandemic, their preference for online channels will remain elevated far above pre-COVID levels. With all the attendant price transparency as they shop online, they express acute sensitivity to perceived unfair pricing. Only by using AI-based pricing tools, which provide real-time insight into shopper demand signals and price sensitivity, can retailers make optimal decisions about where they need to price aggressively to entice shoppers – and where they can safely recover margin elsewhere in the assortment to sustain a healthy business.
The report also explores the current market sentiment from the retailers’ point of view, highlighting retailers’ willingness to rely on automation and AI capabilities – 70% of retailers said they would be willing to take humans out of key pricing processes in favor of more automated AI-based approaches. In fact, 60% of retailers stated that as a result of the pandemic, they are putting some level of focus on AI-powered pricing to ensure pricing aligns with today’s rapid shifts in price sensitivity.
The report provides a wide-ranging overview of current market conditions and what retailers must do to structure for success in a turbulent environment, calling on an array of industry leaders and primary research findings to structure its arguments and conclusions. Download full report.
