The dos and don’ts of dynamic pricing in retail
Dynamic pricing doesn’t have to be extraordinarily complex, but it does have to be strategic and disciplined. Here’s a checklist for retailers.
By Sara Bondi, Maura Goldrick, Emily Reasor, Boudhayan Sen, and Jamie Wilkie – Over the past year, as homebound consumers placed online orders for everything from groceries and soap to yoga mats and laptops, many people were reminded of how easy it is to comparison shop on the internet. With just a few clicks, a shopper can find out which retailer sells a particular item at the lowest price. And because the shift to e-commerce is expected to continue even in the postpandemic era, pricing will become an increasingly important competitive tool for retailers. Dynamic pricing, in particular, is poised to become one of the core capabilities that sets winners apart in the retail landscape of the future.
Simply put, dynamic pricing is the (fully or partially) automated adjustment of prices. It’s a staple of the travel industry: dynamic pricing is the norm for airline tickets, hotel rooms, and ride-sharing services. In e-commerce, Amazon has long been a leader in dynamic pricing; the company reprices millions of items as frequently as every few minutes. But dynamic pricing isn’t just for travel companies or e-commerce giants, and it doesn’t necessarily require ultra-sophisticated software that changes every product’s price multiple times a day. Even traditional retailers can reap tremendous benefits from merchant-informed, data-driven algorithms that recommend price changes for selected products at some level of frequency.
Despite the competitive advantage that dynamic pricing can confer, few omnichannel retailers have developed this capability. Some are only now starting to explore the potential of dynamic pricing. Other retailers conducted half-hearted and poorly planned pilots that, unsurprisingly, had little impact and thus failed to get the organization’s buy-in.
Dynamic pricing isn’t just for travel companies or e-commerce giants, and it doesn’t necessarily require ultra-sophisticated software that changes every product’s price multiple times a day. more>
Posted in Business, Economy, Education, History, How to, Net, Product, Technology
Tagged Business improvement, Internet, McKinsey, Retail, Skills, Technology
CEO dialogue: Perspectives on reimagining operations for growth
The hyper-acceleration of the Fourth Industrial Revolution (4IR) has led to an unparalleled industry transformation, giving organizations a unique opportunity to reimagine operations for growth.
By Enno de Boer, Katy George, and Yves Giraud – In late March, CEOs representing leading innovative organizations from around the world joined McKinsey & Company in collaboration with the World Economic Forum for a discussion on the future of manufacturing. Hundreds of thousands of participants across dozens of industries tuned in to hear from Satya Nadella, CEO of Microsoft, Alex Gorsky, chairman and CEO of Johnson & Johnson, and 11 CEOs of companies that recently joined the Global Lighthouse Network, a community of world-leading companies using 4IR technologies to go beyond productivity improvements to create sustainable, profitable growth.
Their conversation has been edited for clarity and legibility.
“Digitization is going to touch every aspect of our business,” said Alex Gorsky, Johnson & Johnson. “I can´t imagine ten years from now that whether it’s our businesses, our manufacturing, our financial systems, our human-resource systems—it will just be so imbued into every process, every function, every connection that we make.”
Unique growth opportunities
By deploying 4IR technologies at scale, lighthouses are creating new revenue streams through new business models. These companies are more in touch with what their customers want, even as preferences change faster than ever—and they have built the capability to respond rapidly and gain market share in the void left by others that get stuck in pilot purgatory. In fact, being stuck in the pilot phase is a more common feeling in 2020. The three-year trend shows scaling Industry 4.0 tech is reversing. Industrials have had their investments pressure-tested, and as a result have realized they have not scaled as much as they thought. more>
Posted in Broadband, Business, Economic development, Economy, Education, History, How to, Leadership, Net, Science, Technology
Tagged Broadband, Business improvement, Capital, Industry 4.0, Internet, Leadership, McKinsey, Skills, Technology