Insights from Our Experts
For the retailer, Artificial Intelligence knows the price is right.
Artificial Intelligence is turning more eyes than ever, from corporate boardroom meetings to small businesses, it's the hot topic. With the internet, the retail industry has already witnessed the possibilities and new business avenues the influx of technology can create and rather than the primary instinct of caution to a new change, the retailers are seeing it as a powerful tool that industry needs to stay ahead of the curve with changing market trends and customer behavior. As per WBR's study, a good 57% of retailers are planning to use AI to solve logistic and supply chain problems.
The insightful raw data when processed with artificial intelligence and machine learning can produce incredibly engaging customer experience and flawless supply chain management, but it is the 'pricing' that is more important than any other factor of retail business and with AI retailers can gain a competitive edge and set precisely the right price.
AI can hit the pulse of pricing
Pricing is not a guessing game but a strategic mechanism aiming to create a profitable demand of the product, keeping in mind the brand's image, optimization, and the product's marketing and positioning based on the localization. The right pricing works in the same way as 'being at the right place at the right time', and the best price is the right price put at the right place at the right time.
Unlike traditional math of spreadsheets and calculations used to analyze how customers are engaging with different products and their preferred channel to engage so that the right price can be calculated to maximize profit, this leaves a lot of room for vague guesses and assumptions. This is precisely where artificial intelligence makes the difference, by putting the data through various optimization models that use machine learning to categorize products w.r.t time and location, for example calculating the right price for a pair of winter boots in summer when the demand is low will be different than what it is in winter when the demand is high and through artificial intelligence retailers can start predicting the best-optimized price for the product which otherwise would’ve been an indefinite approximate.
AI can turn reactive pricing into proactive pricing
Retailers traditionally use historical data to decide pricing, basically predicting the future based on past demand. Artificial Intelligence makes use of the past as well as real-time data to decide the right price for the product, social media trends, customer's sharing habits, season, holidays, weather and much more. Together with machine learning retailers can know the probability of an upcoming demand level with more accuracy than ever before that will drive higher revenue and profits.
AI creates a dynamic pricing model
Artificial Intelligence offers retailers the luxury to opt for a dynamic pricing model lessening the risk of wastage by avoiding excess stocks by navigating real-time customer demands or when low on inventory, the AI models set the right price in such a way that sales and profit are maximized.
AI knows the price
Artificial Intelligence offers a bunch of powerful tools which in the hands of retailers can help them make better decisions on pricing than ever and the fact that this is data-driven makes it more accurate than it was ever possible with the traditional math and assumptions. Still, there is a fear of how artificial intelligence will impact jobs, but the truth is artificial intelligence can help retailers in running and keeping their business more profitable than ever and the human employees can focus on initiatives to create a better relationship.
AI takes the guesswork out of pricing, and what retailers get is a very concrete and intelligent pricing model that is fail-safe to market conditions, the changing customer behavior and factors that contribute to supply chain irregularities, the retailer will never again remain blind to what's coming ahead and they have to do is let artificial intelligence put the right price.
Pricing is math and machines are better with math, let AI do it for you.