During a recent live panel discussion, Rethinking Retail Pricing: Strategic Imperatives in the Age of AI and Empowered Customers), retail industry leaders came together to share their perspectives on the state of retail and to discuss how retail, shoppers and the technology have evolved and where they’re going next.
Guest speakers included Brendan Witcher, Vice President and Principal Analyst, Forrester Research; Michael Terpkosh, Global Retail, Wholesale and Supply Chain Executive; and Cheryl Sullivan, Chief Marketing and Strategy Officer for Revionics. Retail Leader Editor-in-Chief Mike Troy was the moderator.
If you missed the event and do not have time to watch the full replay, here are the key takeaways from this enlightening panel discussion.
Top 5 Takeaways:
1) 90% of retailers believe that shoppers will not wait for a discount on an item in order to make a purchase. In reality up to 48% of shoppers will wait as long as it takes to receive a discount on the item they’d like to purchase. Retailers are misunderstanding the capital truths about consumers; they have the right idea – wrong ideology on how long they will wait for a good price or promotion.
2) Retailers and shoppers alike agree that promotions matter to pricing strategies. The one caveat with promotions currently is that many retailers are making them online only or in-store only, which isn’t as customer-centric as retailers say they’d like to be. In the digital age, when consumers have multiple choices, promotions and prices need to be targeted and flexible across channels to be competitive.
3) Retailers should leverage AI in pricing tools to understand shopper price sensitivity. You can’t craft relevant pricing that engages customers at the item, channel and location level without harnessing AI capabilities that help you accurately predict how changing a price impacts demand at the granular level. This is critical as it lets you do what-if scenario analysis to bring your price strategies – whether it’s driving traffic, increasing sell-through or maximizing margins – to life in all your channels, as well as honing your desired price image. Read the full Forrester Study here for metrics & statistics.
4) It’s crucial to get pricing and channels correct from the start. Don’t lose customers because of channel-specific pricing and promotions that don’t take other channels into account. This is an omni-channel world and your retail promotions need to be catered to that.
5) Lastly, if you don’t want to lose to other retailers, be nimble with your pricing strategy. That is only possible with some type of AI Software that continues to evolve and learn with changing markets, competitive landscapes and shopper behaviors. We are living in the age of data – there is so much information that the only possible way to make quick concise decisions is to have AI on your side to remain flexible and targeted.
iRetail Success Requires Personalized, AI-Driven Pricing Strategies, a Revionics-commissioned study conducted by Forrester Consulting, October 2018
iiUnderstanding Retail Customers’ Pricing Expectations and Tolerances, a Revionics-commissioned study conducted by Forrester Consulting, May 2017.