It shouldn’t come as a surprise to learn that this holiday season will be unlike any other. And it will be high stakes, too – one in five retailers say their future is dependent on how well they do this quarter.
Major concerns include if, when and how consumers will shop. Deloitte predicts a 1% to 1.5% increase in total U.S. consumer spending from November through January, and a 35% increase in seasonal online sales. Not to mention more than 41% of consumers plan to purchase most of their items online due to COVID-19.
Amazon kicks off an early start to the holiday season this month with Prime Day. In order for traditional brick-and-mortar retailers to truly maintain a solid ground, they will need to ensure not only that their physical stores are operating safely and efficiently, but also that the online shopping experience is seamless.
1. Online wish lists
Taking lessons from baby showers and weddings, retailers can look to online registries to manage shoppers’ holiday wish lists this year. Wish lists add another level of convenience for shoppers, as they can easily share the link to the gifts they want. From there, the items can be bought online or in store. For example, grandparents can buy their grandchild’s favorite toy and have it shipped to arrive in time to open under the tree on Christmas Day. Similarly, a relative can buy a dorm room essential as a present for a family member in college, and have it sent to the store closest to the student for them to pick up.
No matter the shopper, their comfort level of being in stores or their distance from a loved one, online wish lists can ensure that consumers stay connected this holiday season, and this will drive loyalty as they remember which brands made a stressful time much easier.
2. In-store mobile capabilities
For shoppers who do choose to shop in stores, cutting down on time spent inside – from entrance to checkout – will be critical. As a result of COVID-19, shopping journeys are more likely to begin online, meaning there is limited browsing done in the physical store. Having already done their research, a shopper will want to quickly find the cast iron skillet or air fryer they’ve picked out.
The way to most effectively serve these in-store stoppers is to help them easily find the products they want. First, retailers should ensure that inventory displayed online is accurate at an individual store level – it can be a big disappointment if a shopper finds out that an item they were expecting is out of stock. Additionally, mobile apps with store maps and aisle locators can help shoppers independently navigate the store, limiting associate interactions.
Once shoppers have their desired items in hand, a plethora of fast, safe and secure checkout options should await them. Whether paying on their mobile device, an associate’s tablet or using contactless payments at the register, any checkout method should be able to perform the same identical processes, from anywhere.
3. Curbside service
Half of consumers plan to use curbside or contactless pickup options this year. These services have gained popularity as a safe and convenient way for shoppers to get the products they need. However, there are a few factors at play in order for curbside services to run smoothly. First, as curbside blends digital and online activities, all processes and messaging should be uniform, from the mobile app to any resulting emails. Second, any interface needs to be user-friendly. Shoppers shouldn’t be confused when adding or removing items, nor when receiving instructions on when and how to pick up their purchases.
Luckily, for retailers who currently don’t have a curbside process in play, this technology is readily available, without requiring complete integration into all existing store systems, such as POS and merchandise management. There’s no excuse for not providing a fast and convenient curbside experience.
The holidays and beyond
While this holiday season will be unprecedented, there is no doubt consumer behaviors will carry on into 2021 and beyond. Over 80% of consumers who bought a new brand during quarantine said they would keep buying those products, so now is the chance for retailers to prove themselves as one that provides consumers convenience and the products they need. Are you prepared for the holidays and beyond?
While my last dynamic pricing blog dealt with industry-specific features of dynamic price optimization in the fashion industry, today we’ll look at consumer electronics. The consumer electronics industry is one of the most challenging industries I have encountered in the dynamic pricing project business so far. This is, because it turns faster than most other industries and is also driven by one of the strongest competitive dynamics of all. In order to survive as a retailer here, dynamic price optimization using AI software is essential. This is how you ensure your profitability and simultaneously establish yourself as a global competitor. In this blog post I have worked out the 5 most important success drivers that can be achieved with dynamic pricing.
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Clean and detailed product master data
High data quality is the fundamental basis for successfully digitizing and automating processes. For dynamic price optimization, the quality of product master data is crucial. The cleaner and more detailed the data is, the more successfully a pricing software functions, and the more diverse the possible business cases become. For example, if product master data contains attributes such as brand, color or model of an item, you can easily price entire product families intelligently and dynamically with the help of a pricing software.
When it comes to dynamically pricing longtailers, or slow-moving items, the process becomes easier when the number of product attributes that are stored in the master data increases. For this purpose, the attributes of all articles are analyzed and corresponding price groups are formed. Then the longtail products are assigned to these price groups based on their attributes. Thereby the initial price level is determined for these articles and the further price optimization can follow.
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Calculate price elasticities for each product
For the consumer electronics industry, it is particularly important to be able to calculate price elasticities at the product level at least daily. In addition to pricing decisions, these can also be used for advertising. In both cases, the demand for a product highly influences any decision. In the consumer electronics sector, margins are often very low, so many product prices do not have much room to fluctuate – especially when measured against competitors. Here, price elasticity can be used to identify products that are less in the perception of consumers. That means, that customers hardly react to price changes (even to uplifts) of these products and that is why they are also less relevant to competition. The pricing software then prices these products based on gross profit margins, ensuring your profitability and competitiveness in the long term.
In addition, product-level demand can be used as a basis for decision-making in order to actively control advertising campaigns. For example, you may prefer to include products with a high demand in your marketing campaigns in order to increase customer frequency, turnover and sales.
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Determine cross-price elasticities
When it comes to dynamic price optimization, it is important to be able to strategically consider complementary goods and substitutes, and also to be able to price them separately. Complementary goods that are purchased together – such as a monitor and the matching cable – can be determined via cross-price elasticities and offered directly as a bundle. The central advantage of this approach is that bundles can increase both profit and frequency. However, to avoid cannibalization, pricing software should take substitutes into account, so the sale of one item does not automatically lead to a decline in demand for its substitute(s).
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Target sales dates and target sales ratios should be processed by the pricing software
Driving price decisions by target sales dates and target sales ratios enables the optimal use of supplier bonuses or market development funds. At the same time, it also supports your inventory planning team to plan your storage capacities in such a way that, for example, discontinued models are sold out before a new generation is introduced.
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Regular price adjustments
Industry giants such as Amazon often dictate the dynamics of the competition, as is the case with consumer electronics. What’s more, Amazon adjusts its prices multiple times a day, even hourly during peak times. In order to keep up, you should rely on regular price changes. A dynamic price optimization solution supports you in this and takes a large part of the manual price maintenance off your hands. According to your assortment and current influences (e.g. new releases, upcoming holidays or changed demand due to the pandemic), you can adjust prices daily, weekly or monthly. For each price change by the pricing software, you can also specify the business KPIs on which the price adjustment should be based.
From my point of view, consumer electronics retailers can only remain competitive in the long term if they rely on dynamic pricing. Reach out to me today to learn how dynamic pricing can benefit your business.
- First BSI certified SaaS solution for fiscalisation in Germany
- Cloud solution for strictly regulated sectors with extremely high safety and performance requirements
Fiskal Cloud, which is being exclusively offered in the form of software as a service (SaaS), is therefore the first officially authorised, purely cloud software designed to handle the fiscal requirements in Germany. The solution, which has been completely developed from scratch, provides strong evidence that the GK Group and its partners are in a position to introduce cloud solutions for strictly regulated sectors with very stringent security requirements. German fiscalisation with its meticulous requirements is just one field of application for this.
Nearly all of the GK Group’s customers have opted to purchase Fiskal Cloud. They are joined by other well-known market leaders, large and medium-sized traders from a wide variety of sectors as well as numerous partners who are using the system to fiscalise their own till and recording systems. Deutsche Fiskal has been able to acquire a significant market share from a standing start. This clearly indicates the demand for a reliable cloud solution for fiscalisation, which has been completely developed and hosted in Germany, so that companies do not have to rely on hardware-based concepts with medium-term and long-term costs that are hard to estimate.
Fiskal Cloud marks another milestone for the consistent implementation of the cloud strategy at GK Software. The core element of this is the cloud4retail platform, which is being continuously developed and expanded as the technical foundation for the cloud services. On the basis of this platform, it is now possible to use almost the complete portfolio provided by GK software in a cloud. The services and interfaces are also designed in such a way that they support other architecture scenarios. As a result, GK Software can offer its customers the choice of how quickly and to what degree they wish to pursue this path when making the transition to cloud services. At the same time, the system retains the retail trade’s indispensable capacity to make individual adjustments to the fullest extent. When developing the cloud4retail platform, great emphasis was always placed on the issue of developing expansion and adjustment opportunities. The multi-stage expansion concept, for example, includes app enablement, which has been developed in-house by GK, or extensive documented interfaces. This lays the foundation for ensuring that customers or third parties can develop, test and roll out their own solutions quickly and without any intervention in the standard product. Thanks to Fiskal Cloud, GK has now provided the evidence in a different field that it is able to successfully bring cloud solutions on to the market. The AI platform, AIR, the mobile customer solutions on smart phones (MCA) and retail7, the software package for small retailers, are also cloud-based solutions within GK Software's portfolio.
The last time you were inside a convenience store, you may have been making an impulse purchase — a soda or a snack while you were filling up your car. Convenience stores are synonymous with spur-of-the-moment purchases, but now during COVID-19, that type of spontaneity can be rare. As a result, convenience store retailers have not only had to modify their store practices to ensure customer and employee safety, but have also changed their value proposition, taking advantage of its corner-store locations with new technologies to match.
Competition with grocery
While consumers continue to treat themselves to sweet indulgences, the stereotype that convenience stores are stocked with only candy bars and junk food is no longer true. For consumers looking for something fast, hot and fresh food option can provide a competitive edge over grocery stores with their long lines and crowded parking lots.
According to IRI, nearly one-fifth of households purchase fresh foods from c-stores and gas stations, citing convenience as a vital factor. Adding a variety of service offerings — including sweet treats, hot and fresh foods, and snack products — will increase the number of customers that come through your doors.
Order ahead to appease busy shoppers
While the introduction of new food offerings may attract a different audience of shoppers, convenience store retailers must also ensure that shoppers don’t wait in line. Convenience stores are still called convenience stores, so busy consumers don’t want to wait to pay for their items, or for a sandwich to be made.
That’s why order-ahead apps are ideal for convenience stores. Busy consumers can place their orders ahead of time, even customizing them. What’s more, mobile ordering can link directly to loyalty and reward programs, ensuring repeat visits.
Cutting down on lines
Contactless payments or cashierless checkout are most often associated with supermarkets, as they are notorious for long lines and large baskets full of items. But shoppers shouldn’t have to wait in a line to buy just one or two products, either.
For those that order ahead or choose to pay in store, offering a payment option via a mobile device is key. Alternatively, if a shopper is in the store and sees a line forming, they can scan a QR code and pay that way. No two experiences are alike, so providing multiple POS options for a number of different shopping journeys is important for customer satisfaction.
Fuel integration
For convenience retailers that also offer fuel, paying at the pump is often a siloed experience, but has great potential to drive additional purchases. Creating one seamless journey for shoppers, whether that starts before they even arrive at the store, and continues to checkout or at the fuel pump, ensures a positive interaction and encourages loyalty, especially when rewards are established at both.
It shouldn’t take any longer for a shopper to pay for gas than it does to run inside the store and buy a banana. A slow chip reader or having to enter a PIN can delay the entire process — not to mention the need for secure payments that meet the upcoming EMV deadline.
The importance of innovation
By offering order-ahead and pay-ahead capabilities, retailers can help consumers make the most of their time and increase the size of each transaction. In a time where grocery retailers are stepping up their game, it’s imperative that convenience store retailers stay in tune with the evolving needs of their shoppers. The best mobile and payment services provide the flexibility to respond quickly and adapt over time. Let’s find the right one for your business.
Food waste is a massively pressing issue in the grocery industry. Shockingly, about one-third of all food produced goes to waste, according to the United Nations. Recently, The Consumer Goods Forum, consisting of 14 of the world’s largest retailers and manufacturers, launched a Coalition of Action on Food Waste to combat this issue. And consumers are just as concerned. 70% said they’re buying just as many – or even more – eco-friendly product than they did prior to COVID-19.
For grocers, food waste is not just a moral concern, but a business one. It leads to lost sales and revenues and can also create a negative image regarding corporate responsibility in consumers’ minds. There are just too many perishable SKUs with various shelf-lives and receiving dates to manually navigate inventory management through sell-by or best-by dates to ensure fresh items don’t go unsold.
The additional pressures of competitive pricing and promotions, coupled with price perception and the complexity of pricing relationships between products makes it hard to incorporate dynamic factors like expiration dates and rates that can have a major impact on driving better margins. Here’s how you can start doing it.
Optimize the best price
Luckily, there is a way to face this head on today, with AI-based dynamic pricing. AI engines can utilize sales and transaction data to help understand internal and external demand factors. From there, retailers can use best-before or target dates to recognize when perishable items are likely to be sold out, and can optimize the price according to demand and target date. The closer they get to a zero-stock date, the lower the price can become – without hurting margins.
But which products should be priced dynamically? Retailers should look into fresh and perishable products, and those that customers are more price sensitive to, such as a cut of meat. What’s more, when these products are sold at competitive prices, customers will be enticed to shop at your store.
With dynamic pricing, grocers can automatically adjust the price based on relevant context conditions. For example, AI can predict exactly when avocados will begin to turn dark green and establish the optimal price day by day as the expiration date draws nearer – based on relevant market context and historical analysis – to ensure the price compels shoppers to buy them all before they end up in the garbage. Let’s explore a few more contexts in which dynamic pricing can be applied to eliminate waste:
Cross-sell relevant products
Individual products don’t exist in a bubble when it comes to setting an optimal price. Lowering the price of one item can affect a variety of other products. In the best-case scenario, a price cut will positively trigger the purchase of other products. Artificial intelligence can quickly detect cross-sell opportunities with perishable items and items with longer shelf life. For example, a competitive price on fresh garlic bread might incite consumers to purchase pasta, spaghetti sauce, or a frozen lasagna.
Improve inventory accuracy for promotions
Access to robust POS and promotion redemption data can validate and help grocers understand order quantities when managing inventory for an upcoming campaign. If grocers increase stock in preparation for a promotion that isn’t as successful as planned, this can generate a lot of food waste. Instead of manual calculation, artificial intelligence and dynamic pricing can lead to better accuracy and predictability around price and inventory to reduce overstock and wasted food.
Maintain brand image while driving social responsibility
Brand image is important, and food waste can damage consumers’ affinity for the brand. This happens even before the items are thrown away – when visibly over-ripe produce sits on the shelf untouched by shoppers.
With AI-powered dynamic pricing, grocers can establish a win-win scenario. Optimal pricing can provide discounts to shoppers, incentivizing them to purchase products as they near their best-by date, which minimizes food waste at the same time. The more goods that are sold, the less ends up in the garbage – and the less the customer sees sitting there awaiting its fate. What’s more, this maximizes sales and profits for grocers at the same time.
You can explore the benefits and use cases of dynamic pricing further in our ebook, or feel free to schedule a call with us to discuss how we can benefit your business’ unique needs.
Restaurants have suffered as a result of the pandemic, as many dining rooms have closed or operate at a reduced capacity. Restaurants of all sizes have had to adapt, modifying existing models and introducing new processes that streamline online ordering, payments and pickup or delivery. And it’s proving effective. Restaurant Brands International reported digital sales grew 120% year-over-year in Q2 of 2020.
Today’s consumers expect a frictionless journey that allows them to shop anywhere at any time, with the ability to choose contactless and convenient options that keep them safe. In the past, retailers have learned from hospitality providers about how to build brand loyalty through a great experience.
Now, during the pandemic, the pattern has flipped on its head. The hospitality industry has had to learn from grocery and c-store retailers at the forefront of innovation about how to integrate digital and contactless touchpoints at their physical locations, in order to support personalized engagement while ensuring the safety of customers and employees alike.
Let’s explore three technology solutions that are powering the restaurants of the future.
Seamless ordering
Ordering is the first point of contact for a customer, whether it’s done online or in the restaurant. Connected platforms can help streamline the ordering process, ensuring that customers can feel safe by eliminating physical contact. This can range anywhere from an app-less QR code on a customer’s phone that accesses the menu, to wearables for staff or even voice-controlled car ordering. A connected store allows for retailers to serve all customers quickly and safely, regardless of how they order.
Order pickup
One obvious service that retail borrowed from restaurants—and subsequently mastered—is takeout. However, in the grocery and retail space, it’s more commonly known as buy online, pick up in store (BOPIS) or curbside pickup. The key behind streamlining these processes is integrating advanced technology for online ordering.
Restaurants can now do the same with a platform that allows them to easily integrate external services, as well as create and leverage their own tools with app-enablement and open APIs. Instead of a customer having to call the restaurant and notify them of their arrival or leave their car and head inside, a simple one-click action can perform the task.
Payments
If ordering and pickup are contactless, payment should be just as seamless and efficient. Bring-your-own-device alternatives to replace legacy and physical touchpoints are critical to delivering contactless options while still sending immersive personalized and targeted offers. The grocery industry has been doing this for years. Mobile point of sale solutions enable restaurants to provide payment options from anywhere. Whether a shoppers want to pay as soon as they place their order online, or swipe a card once they’re in the physical store, retailers can accommodate.
Similarly, restaurant concepts that exist in convenience or grocery stores, or in malls – often named “grocerants” or “restaumarts” – can implement a cashierless approach similar to Amazon Go, where AI-based item recognition operates a free-flow operations concept. Customers put items on a tray, move to the dining area and are automatically charged for the items.
Follow retail's footsteps
In order to provide a truly frictionless and contactless customer experience, restaurants need infrastructure that enables them to own the relationship throughout the entire shopper journey. The entire omnichannel ecosystem, from online ordering to payments to delivery, can be supported by hospitality software solutions.
With these innovative technology solutions, restaurants can follow retailers’ footsteps and plan for the restaurant store of the future. Let’s plan together.
It’s now been a decade since the ubiquitous iPhone phrase “there’s an app for that,” was first uttered. And with more than 8.93 million mobile apps available globally, it’s a phrase that’s held up well over time. But the popularity of apps means the market is now extremely saturated, and consumers are often hesitant to install or pay for an app.
In fact, U.S. consumers use an average of 20 apps per month and they’re most likely to download entertainment apps, such as gaming, sports, or video. For a retailer to succeed in getting a shopper to download their app, they must provide – and communicate the potential for – massive benefits in return.
That’s why we’ve seen app-less technology, or internet enabled services that provide functionality for mobile devices without the need to download or register for an app, explode in popularity recently. It eliminates any barriers for customer interaction.
Let’s explore the benefits of both approaches, and what the differences mean for retailers and customers alike.
Apps to drive personalized service
Mobile apps can be immensely beneficial when it comes to self-checkout and queue busting. When a shopper downloads an app, they can self-scan products on their own device, and then pay directly from it. What’s more, when shoppers have to register and sign into an app, they share purchase history that can help retailers send personalized promotions and recommendations at the exact right time and place where it feels helpful and rewarding, instead of pushy or invasive.
Because retailers’ apps are often tied back to the rest of its systems, omnichannel connectivity provides opportunity for real-time pricing and inventory management, too. After all, dynamic pricing is quickly becoming an essential capability for responding to both significant and subtle shifts in demand.
One potential roadblock for mobile apps is the cost of maintenance, including regular updates and security management as it must meet guidelines for App Stores. The biggest barrier to engagement, as discussed above, is shopper buy-in. Requiring a download, even when an app is free, is an extra step of friction. There must be loyalty rewards or other immediate added benefits tied to the app in order to convince a shopper to take the time to find the app, download it, register, and keep it on their phone.
App-less tech to improve the user experience
Native mobile apps are built for specific platforms such as iOS or Android. On the other hand, web apps or app-less technology can be accessed via any internet browser, and adapt automatically to whichever device it’s accessed on.
Imagine all of the benefits of an app, without the need for friction on a shopper’s end. With additional accessibility and improved user experience through app-less technology, retailers can drive higher adoption and usage rates. Shoppers gain instant access to services and information as they needed it, from multiple touchpoints.
Now, with QR code readers built directly into phone cameras, shoppers simply open their phone and can begin mobile shopping in stores. App-less technology can help speed up processes such as checkout, as well as order fulfillment and BOPIS. What’s more, retailers can easily integrate new payment methods as they continue to evolve.
As we’ve said in the context of headless commerce, modern retail demands flexibility and control. App-less technology can do just that. Without being tied to an app store, updates and changes can be made at any time.
Stay in control of customer interaction
Regardless of whether retailers choose to implement app-based or app-less technology, it’s important they make decisions that allow them control of the customer interaction. If you eliminate frictions for shoppers and provide them an easy experience, they will continue to shop with you in the future.
Let’s set up some time to discuss which option is best for you to succeed and meet your shopper’s expectations.
Software providers can talk and talk all day about what makes their offering the best. But hearing from a retailer who implemented the technology and is actively seeing benefits with their customers is the true testament of value.
The future of retail is developing at a rapid rate today, with self-checkout, mobile shopping and BOPIS, and other services that put additional pressure on both new retailers and retailers with legacy systems looking to keep up with the pace of change.
In this blog, we’re going to highlight the experiences a few of our long-term U.S. customers have realized during their time working with us.
Payments
Savers Value Village is using our TransAction+ payment solution to drive responsive and adaptable payment capabilities. The number of ways a consumer can pay seems endless –cash, debit, PIN-less debit, credit, gift cards, etc. – so the ability to quickly process each and every one of them is critical. Today, TransAction+ allows nearly 3,000 point of sale lanes across more than 300 Savers Value Village store locations to run independently. In addition to eliminating store-wide downtime risks and minimizing security risks, we’ve also reduced transaction times by 33%.
Scalable point of sale services
With customer engagement and consistent brand experience so critical to retailers’ long-term strategy, customization potential is a critical factor when it comes to the point of sale. Retailers require a system that can be configured to their unique needs. What’s more, fully managed cloud services now deliver all the functionality of on-premise enterprise systems.
Our relationship with Beall’s began in 2012 when they deployed GK’s enhanced coupon solution for SAP POS. Since then, Beall’s has implemented numerous custom enhancements, such as EMV credit card authorization. Our ability to integrate new technology with Beall’s existing core SAP POS software has helped leverage and maximize the life of that system, and plan for future requirements.
Integration with legacy systems
For new retailers looking to grow their business, scalability is a particularly important factor to consider with technology solutions. Platform architecture should make it easy for the system to grow alongside the business. As retailers look to expand their physical footprint, they often find it challenging to scale and optimize on-premise solutions. Cloud software can ensure retailers can continue to grow without unnecessary IT overhead.
On the other hand, retailers that already have existing legacy systems they rely on for core services means that the simplicity of integrating new services and solutions is the key to avoiding costly and slow adaptation.
According to PGA TOUR Superstore, the right solutions should be instrumental to “execute in the present and prepare for the future,” just as our payments solution has proven to be for them.
The golf equipment retailer originally chose GK Software because of its reputation for innovation and the suite of add-on modules that provided immense functionality without having to change its core platform. Today, PGA TOUR Superstore leverages GK’s TransAction+ payments solution and a suite of Central Services.
Innovative solutions for the world's leading retailers
One thing we’ve found in common between the retailers we work with is that they all look for professional support, fast implementation, and technology that enables them to best serve their present and future customers, regardless of how their preferences change.
Our fully managed cloud services give retailers access to enterprise functionality and scalability without having to build out their own expertise or infrastructure. Instead, they enjoy the freedom to deploy increasingly critical services quickly while maintaining the flexibility to deliver unique, differentiating customer interactions with ease.
Our long-lasting relationships - often spanning decades - are a testament to both our expertise in the space, and ability to innovate as retail changes.
See what more of our satisfied customers have said about working with us and reach out if you’d like to learn more about how our platform and services can help you continue serving your customers the experiences they expect and you desire.
In my last blog spot on coupons and bundles, we touched on industry-specific differences that can be crucial to a retailer’s success in the context of Dynamic Pricing. I would like to go into this more detailed and show you which industry-specific challenges and opportunities Dynamic Price Optimization brings with it and how you can use AI software perfectly adapted to this.
This blog post will therefore deal with the specific challenges and chances in the fashion industry. It is special in many ways; I have experienced this in several customer projects. Basically, this industry offers great potential for Dynamic Price Optimization because clothing is always needed and because the average margins are comparatively high. These reasons alone mean, that applying AI methods for price optimization offers a great deal of leeway and creates a large lever for profit potential. Nevertheless, a few technical and strategic requirements should be considered in order to generate the maximum benefit from a dynamic pricing software solution.
- The life cycles of many items in a fashion assortment are comparatively short – often only about 4 to 6 months. During this short period of time, an item must be launched successfully, it must generate as much profit as possible in its peak season and it must be sold out on time (and yet margin-saving) to free up stock for the next season. Take swimsuits for example, as a product that’s often introduced early in spring for a summer target, before warmer clothing replaces its inventory in the fall. The more excess inventory on the shelf and in the backroom come September, the less profitable a retailer is. Therefore, it is particularly important to adjust prices regularly and strategically.
How does a dynamic pricing software support these requirements?- The software offers various algorithmic procedures for pricing all product life cycle phases.
- The software allows to control the optimization target (revenue, sales, profit etc.) for each product life phase and for each product group in a differentiated way.
- The software can provide relevant, demand-based prices at least daily.
- Fashion assortments are usually both broad and deep. This means that they contain many different items and many variations of these products. Think about the number of dresses, skirts, pants and shoes you see in one shop or store – as well as the number of sizes and colors. This results in both technical and strategic requirements if the product range is to be dynamically priced.
Which functionalities does a software for dynamic price optimization has to offer accordingly?- The software must have a master-variant capability. In concrete terms, this means that master and variants can be treated both as a relational unit (keyword: family pricing) and separately from each other – both in the algorithmic calculation of demand and in the final pricing. This should be done because women’s running shoes in size 10 are likely to have different demand than size 7 and – if this is part of the strategy – should perhaps be able to be priced in a correspondingly graded manner. The pricing software must therefore be able to calculate and provide differentiated master and variant prices.
- The software must also have a powerful tracking functionality in order to be able to record and process demand in detail at variant level. This forms the basis for sales forecasting and thus for optimal price control.
- The software must be able to process large and complex data volumes with high performance. Fashion assortments consist on average of 20,000 to 50,000 items, and when variants are included this number climbs up to several million. A Dynamic Pricing solution must scale linearly so that it is possible to record the demand for each individual item at variant level (tracking functionality), derive price elasticities and sales forecasts and provide optimized prices.
- Promotions and marketing campaigns are an integral part of every fashion season, as well as part of customer’s expectations. In order to be successful with promotions and above all not to give away too much earning potential, two things are crucial: You have to promote the right items to increase customer frequency and you need to set the right prices for all non-promotional items. With this combination, promotions achieve great success because the promotion itself drives customer frequency and the Dynamic Pricing software keeps the margin of all other products at a stable high level. In this way you increase frequency, sales and profit at the same time.
How can an AI-based pricing software support your marketing campaigns?- The software should be able to suggest products for marketing campaigns that are relevant and timely for customers, for example based on current demand.
- The software should be able to be controlled quickly and easily so that promotion products can be excluded from the algorithmic price calculation with just a few clicks.
- The software must be able to differentiate between promotions and “normal” purchasing behavior so that promotions do not lead to a reduction in the general price level.
In principle, a software solution for dynamic price optimization should fit into your existing processes as seamlessly as possible. It should also use and supplement the wealth of experience and knowledge of your pricing managers, for example with highly complex data analysis and statistically valid decision supports. The software must be able to support your existing pricing processes and optimize them in such a way that your business units achieve sustainable growth. You can find out how to approach such a project here !
- Turnover increases by approx. 12 percent
- Significant increase in profitability
The company was able to exceed the comparative results from the previous year by 11.7% or EUR 5.89 million at a figure of EUR 56.16 million. EBITDA grew even more strongly and increased by approx. EUR 7 million to EUR 6.26 million in comparison with the previous year. The positive developments in the company’s cloud business and growth in the USA were responsible for the increase in turnover and the strong growth in earnings. The effects of the efficiency programme, which was introduced in the second half of 2019, were also extremely positive.
The month of July, which was also highly successful, gives reason for optimism for the further course of this financial year, particularly because business with new customers was very restrained during the first half of the year because of the COVID-19 pandemic. In the light of this, the Management Board is standing by the forecast that it provided in the 2019 annual accounts for the 2020 financial year as well as the restrictions that it contains regarding further statements beyond the year 2020.
