AI and Price Optimization in Retail
Pricing has become a key strategic factor in retail, and artificial intelligence (AI) and machine learning are giving retailers new tools to help them more fully and effectively implement price optimization strategies. Here are some of the highlights:
- Digitalization made price optimization strategies in retail possible, but AI and machine learning are substantially improving the efficacy.
- Price optimization uses data analytics to formulate desired pricing level and increase the probability of achieving specific objectives, including profit maximization and operational goals.
- Price optimization can improve retail operations by strengthening inventory management and being able to respond more quickly to market dynamics.
- For most retailers, the best way to introduce price optimization platforms is through partnerships with third-party data analytics and AI specialists.
- We expect AI to become more important in price optimization and to be complemented by new technologies that will expand consumer analytics capabilities for retailers.