This fall, Pricer presented a webinar hosted by industry thought leader Chris Field, retail analyst and chairman of Retail Connections, Anastasia Laska, VP of Business Development & Partner Alliances at Revionics, and Duncan Potter, CMO at Pricer. The webinar focused on how advanced tactics for optimizing prices can affect the bottom line and create strong competitive advantages for retail stores.
Anastasia Laska from Revionics started by outlining key retail conditions that drive demand for price optimization, mentioning factors such as hyper-connected consumers, “always-on” channels and aggressive competition. Because of this, technology such as ESL and price management play an increasingly important role to manage rapid, automated and aligned responses to market changes.
Connecting to the trend of consumers increasingly comparing prices, Anastasia Laska showed how global surveys indicate that there is a strong acceptance from consumers when it comes to frequent price changes, as long as they are nonarbitrary and fair. The surveys also show how consumers often look for fair prices, rather than the lowest price, stressing the need for retail to better understand the customer's willingness to pay.
Duncan Potter from Pricer highlighted how dynamic pricing is far from new, having been used for decades in gas stations and for years by disruptive vendors such as Amazon, with broad acceptance from consumers. But in order to be successful with dynamic pricing in the coming decade, Duncan stressed the need to adopt a bigger picture view of infrastructure, processes and strategies.
The view includes reliable platforms at the core, offering both scalability and speed, together with hardware that can handle real-time responsiveness and features such as dynamic product positioning and real-time flash. Duncan also stressed that dynamic pricing is helped by automated processes that are linked to both business goals and aligned with omnichannel strategies.
Taking a bigger picture view also shows how the technology used for dynamic pricing supports innovative solutions in retail stores, covering everything from planograms to waste management. Duncan presented several use cases, such as Click & Collect, by which stores on average can save more than 40 000 EUR annually.
The panel outlined five key factors to successful dynamic pricing:
- Understand your customer’s willingness to pay
- Price competitively against meaningful competitors
- Enable omnichannel strategy & management
- Work at the required frequency to align with your business goals
- Automate, with approval and exception management capabilities – resource efficiency
Anastasia Laska also stressed there is a danger of using too rigid rules when optimizing prices, instead encouraging retailers to make use of technology advances in AI and machine learning to better match shoppers’ purchasing behavior.
Live polls during the webinar showed that there was a strong level of agreement from the participants in the webinar, who came from a wide range of senior roles within leading retail chains. Nearly 70 percent stated that they would change prices more often in the future, and the key area to automate going forward for most was pricing, while getting the right ROI was a key factor for the investment.
Host Chris Field invited Pricer and Revionics to present business cases for using ESLs and dynamic price optimisation. Building on strong synergies, the combined business case positively affected the bottom line, showing how amortisation of investment and cumulative cash flow was achieved by retailers in less than two years.
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Published: October 26, 2020