AI-Powered Price Optimization Could Boost the UK Retail Market

IN Artificial Intelligence — 04 October, 2018

The latest figures from the UK Office for National Statistics (ONS) has revealed that the World Cup and this summer’s heatwave have kept shoppers away from the high street. Sales grew by 0.7 per cent in July following a 0.5 per cent fall in June – changes primarily driven by strong online sales and the food sector, with barbecues, alcohol and garden furniture experiencing big boosts.

AI-Powered Price Optimization Could Boost the UK Retail Market

High street retailers did not enjoy a similar level of growth. Yet with salaries predicted to rise above inflation, these businesses may be hoping that shoppers return to the high street with more money to spend. However, if this is to happen, these retailers must ensure that they have the processes in place to maximize sales and increase profitability.

The mixed outlook for the UK retail market highlights the need for retailers to adapt a much more intelligent and data-driven approach to their pricing strategy, and to better understand and predict market conditions. In a fundamentally changing market, retailers cannot carry on doing things the way they always have, and those that adopt a more agile, responsive and digitally-focused approach will gain a competitive edge and be in a much stronger position to survive and thrive in the increasingly challenging UK retail market.

Retailers have been under a significant amount of pressure over the course of the past year from the weak pound, the unpredictability of consumer behavior and uncertainties triggered by Brexit. While retailers have recognized the need to innovate in order to address these changes in the market, they do not always have the structure and processes in place to find, assess and adopt the best solution.

Price Optimization Solutions

Retailers today have access to vast reams of data, including past sales patterns, customer footfall and external information such as the weather and public holidays. When this data is combined with advanced AI technology, not only are retailers able to better understand and predict consumer demand, but it can also help them to understand and adapt to market conditions in order to make better decisions.

Price optimization solutions powered by AI can accurately predict customer demand and automate pricing decisions for a retailer across every product category and every store, learning the relationship between price changes and demand while incorporating a retailer's unique business strategy. It can automatically set the optimal prices to deliver the best bottom line, while rapidly sensing vital demand signals from changing market conditions and data such as sales, promotions, weather and events.

Price optimization solutions can make sure that retailers are selling their products at the right price, in line with market conditions, to ensure maximum sales, margins and profitability. Retailers who implement intelligent, AI-driven technology can eliminate the burden of manual intervention in processes such as pricing, enabling them to save money, create leaner operations and devote more resources to improving the customer experience.

This dedication to improving the customer experience will be critical to tempting consumers back onto the high street. After an underwhelming summer across many categories, retailers will be hoping that an upturn in the economy and cooler weather brings shoppers back. If this does occur, they will need to be well prepared to maximize sales and increase profitability, and should look to AI-driven solutions that are already available to help them achieve those goals.

 

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