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
A transformation in store
Brick-and-mortar retail stores need to up their game. Technology could give them significant boost.
By Praveen Adhi, Tiffany Burns, Andrew Davis, Shruti Lal, and Bill Mutell – Now should be a great time in US retail. Consumer confidence has finally returned to pre-recession levels. Americans have seen their per capita, constant-dollar disposable income rise more than 20 percent between the beginning of 2014 and early 2019.
Yet despite the buoyant economic environment, many brick-and-mortar stores are struggling. In the last three years, more than 45 US retail chains have gone bankrupt.
Yet rumors of the physical store’s death are exaggerated. Even by 2023, e-commerce is forecast to account for only 21 percent of total retail sales and just 5 percent of grocery sales. And with Amazon and other major internet players developing their own brick-and-mortar networks, it is becoming increasingly clear that the future of retail belongs to companies that can offer a true omnichannel experience.
Retailers are already wrestling with omnichannel’s demands on their supply chains and back-office operations. Now they need to think about how they use emerging technologies and rich, granular data on customers to transform the in-store experience. The rewards for those that get this right will be significant: 83 percent of customers say they want their shopping experience to be personalized in some way, and our research suggests that effective personalization can increase store revenues by 20 to 30 percent.
Several new technologies have reached a tipping point and are set to spill over onto the retail floor. Machine learning and big-data analytics techniques are ready to crunch the vast quantities of customer data that retailers already accumulate. Robots and automation systems are moving out of factories and into warehouses and distribution centers. The Internet of Things allows products to be tracked across continents, or on shelves with millimeter precision. Now is a great time for retailers to embrace that challenge of bringing technology and data together in the offline world. more>
Posted in Broadband, Business, Economic development, Economy, Education, History, How to, Net, Science, Technology
Tagged Broadband, Business improvement, Internet, McKinsey, Omnichannel, Retail
On-Trend, On-Time Fashion Design Software
Siemens – Product innovation is critical in every industry, whether it’s automotive, aerospace and defense, consumer goods, or retail. But in the “fast fashion” retail market, innovation needs to happen constantly, as customer preferences and needs for apparel, footwear and accessory goods change. The challenge is keeping up with this demand, whether you discover it on a trip to Milan or through a social network, and filtering the best ideas into a pipeline of new styles that hits the market at the right time and in the right place.
Siemens PLM Software’s solutions for apparel, footwear and accessories provides buyers, designers, technical designers, merchandisers and senior management with a central location to capture new trends, collaborate across the supply chain, and effectively manage the fashion product development process, so your company always goes to market with the optimal assortment of new styles.
You are provided with fashion design software that incorporates decision support, integrated specification management, and value chain collaboration with secure, global access for your entire team. Manufacturers and their supply chain partners are able to collaborate to deliver new styles that customer want, when they want them, and have visibility to emerging risks and opportunities. This ultimately leads to efficiencies that deliver new fashions — whether clothing, footwear or accessories — to the market that are on-trend, and on-time. more>
Posted in Business, Economy, Education, Product, Science, Technology
Tagged Business improvement, Manufacturing, PLM, Productivity, Retail, Siemens, Technology
Retail Digitization… Friend or Foe?
By Brian Lavallée – The retail industry is one of the most competitive industries today, placing enormous pressure on the retailers who are continually striving to reinvent, reinvigorate, and rejuvenate their position with buyers, who are more informed than ever due to readily available online resources, long before they enter a brick and mortar store.
The same assets that consumers use to become increasingly informed can and are also being leveraged by retailers to best become the store of choice to sell their products – networks and data analytics.
The wealth of readily available and free online resources allows customers to perform advanced reconnaissance by researching product specifications, product field performance, as well as comparative product analysis pricing, performance, warranty, and user experience. This means that consumers are extremely informed before they purchase a product and often more so than the salesperson.
In short, the digital transformation has forever reshaped customer behavior and the shopping experience, which means retailers must change to this new shopping environment often by leveraging the very same tools that created the shopping ninja – networks and analytics – which allow retailers to create the required digital shopping experience that today’s consumers want and need. more>
Posted in Broadband, Business, Communication industry, Economy, Net, Product, Technology
Tagged analytics, Broadband, Business improvement, Ciena, Digitization, Retail
By Megan McArdle – In response to the competitive threat of Amazon.com Inc., Best Buy decided to match its prices. You can understand why it wanted to do this, but you can also easily see why this is insane. Best Buy is never going to beat Amazon on price; Amazon’s warehouses give it giant economies of scale. And it doesn’t have to spend money making the display space pretty.
Back in November, when Best Buy announced this strategy, I wrote, “It’s hard to see this ending well.” And it hasn’t. more> http://tinyurl.com/kgnt4a6
By James Davey and Kate Holton – Britain’s biggest retailer, Tesco, wrote down the value of its global operations by $3.5 billion and announced plans to exit the United States.par
Tesco’s fightback plan for Britain, where it makes over 60 percent of revenue and profit, has focused on more staff, refurbished stores, revamped food ranges and price initiatives – all aimed at reversing years of underinvestment and halting a loss of share to rivals like J Sainsbury and Asda. more> http://tinyurl.com/bslwfmepar
By Steve Denning – J.C. Penney Co. [JCP] has ousted its CEO, Ron Johnson, the chief executive who reinvented retail at Apple Inc. [AAPL] and who arrived at JC Penney just 17 months ago.par
‘e2’80’9cOne of the big mistakes was perhaps too much change too quickly without adequate testing on what the impact would be,’e2’80’9d said Bill Ackman, the principal shareholder of JCPenney’e2’80’99s and the driving force behind Johnson’e2’80’99s recruitment.par
Was Johnson’e2’80’99s idea itself flawed? Offering Better product and being more honest with the consumer. Was it too much too fast? Or was the idea itself ok? more> http://tinyurl.com/coe352r