A study of 750 retail managers and directors in the UK has found that many feel that they are not making the right pricing decisions for their customers.
The study, carried out by Blue Yonder, a provider of predictive applications for retail, found that 52% of senior managers confirmed they have invested in price optimisation in the last two years, with 25% saying they feel they need better price optimisation in their businesses.
In addition, less than half (46%) of retail managers say they base price on external factors, such as competitor pricing, while 27% of prices are set manually by managers.
“Pricing has always been a key strategic area in retail, but in the age of price wars and digital transparency, it has become a real differentiator,” commented Professor Michael Feindt, founder of Blue Yonder.
“Through the rise of the discounters and online retailers, the buying power pendulum has swung in favour of the shopper. Price too high and you will put customers off, price too low and those already tight margins are squeezed even further. To survive in these hard times it is essential to determine the right price individually for each product at certain points in time, based on machine learning algorithms.”
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.
