Understanding AI and how it leads retailers to pricing success
Data is knowledge. Data is profits. Data is the key to driving a successful pricing organization, if you know how to use it. When it comes to retail, Artificial Intelligence is the most effective, efficient and advanced way to unlock your data for pricing that will entice customers and support business goals. Here’s why retailers need AI price optimization.
What is AI?
Artificial Intelligence (AI) opens up more opportunities for interpreting and understanding your data. AI uses machine learning (ML) to discover patterns within your data and interpret the market environment around you, in order to provide deeper understanding into consumer behavior and the impact of pricing changes. In addition, ML learns from your data to make predictions. If I raise the price here, what is the impact over there?
But AI doesn’t stop at machine learning. Not only does AI make predictions, but also decisions. AI can actually analyze all the possible pricing actions and outcomes and determine which way is the best way forward.
AI for Price Optimization
So why AI for pricing? In the simplest way of putting it, data science helps retailers unlock their data to understand their customers at a more granular level. With a deeper grasp on consumers’ behaviors, motivators and perceptions, retailers can tailor their pricing strategies to better suit what customers want and offer optimal prices.
AI is able to account for the numerous factors that influence consumer demand, like weather, seasonality, your competitors, and channels, to name a few. Using this information and more, AI is able to assess and predict demand with accuracy and precision, and suggest an optimized price accordingly. It can efficiently and accurately comb through massive amounts of your data and analyze the entire space of possible options and outcomes to determine the right prices for achieving desired results.
Pricing also remains one of the fastest ways for a retailer to impact their revenue and margins. Backed by AI, retailers can regularly identify profitable pricing actions for a truly agile and dynamic pricing organization. Plus, leveraging AI frees up your pricing analysts to focus on driving greater strategy and value generation for the company.
34% of top retailers have already implemented AI lifecycle pricing solutions, and 58% plan to by the end of 2021.* Market leaders recognize that AI price optimization is the key to improving overall margins, creating a better value proposition, and providing consumers with a more tailored pricing experience.
AI Pricing Today
The major retail disruption caused by COVID-19 has shown why AI price optimization is more important than ever. With unprecedented market conditions and rapid shifts in consumer behavior, retailers are largely left taking shots in the dark when it comes to pricing and demand planning.
The answer is AI. Retailers need a robust AI solution that can continuously adjust to the ongoing changes and offer trustworthy price recommendations through uncertainty. AI will enable retailers to more quickly recover and adapt to the new retail landscape, as well as better prepare for any further disruptions or unexpected shifts the future may hold.
Retailers around the world rely on Revionics to guide their pricing strategies because our AI solutions provide clarity and confidence for every pricing decision. Unlike other tools, our transparent data science models allow you to see where sales forecasts and price recommendations are coming from, helping to enhance not just your pricing, but your pricing knowledge as well.
With nearly 20 years of tuning behind our AI, our science is something you can trust. In the tech world, newer and flashier are often seen as better. But when it comes to AI, mature and robust have the advantage. From detecting noise to adapting for new changes in the market, younger solutions can’t compare to an AI engine fed on years of real retail data from dozens of global retailers.
Think about the AI that powers a self-driving car. Would you get in the new car that’s merely conducted a few test runs? Or the tried-and-true vehicle that’s driven around the world through traffic jams, inclement weather, roadblocks and more?
Reach out to talk to one of our pricing experts and see how Revionics AI price optimization solutions can help further your business and pricing goals.
*Retail and Price Optimization Market Research, a RSR study commissioned by Revionics, 2020