With the dawn of the year 2022, when the world has experienced a two-year period of global pandemic, isolation and lockdown, the need for technology upgrade seemed inevitable. ‘Human Intelligence’ and ‘Skills’ are soon going to be partially replaced by ‘Artificial Intelligence’.
The Ecommerce Boom
Online shopping has almost taken over actual physical shopping in the last two years. Ecommerce businesses have grown tremendously in this period. According to sources, the global ecommerce market and other non-store retailers were estimated to reach US$ 2.3 Trillion in the year 2020. Projected to grow at the rate of CAGR 13.5%, it will reach around US$5.1 trillion by 2026. These figures show that staying in the ecommerce business requires a greater level of automation, and not just human knowledge and business acumen.
Amazon’s Success – Exemplary
While Amazon ruled the US and European ecommerce market in this period, it owes its success to its ever increasing huge global customer base and dynamic pricing model. With millions of products put up for sale online every day in thousands of categories and area-wise distribution, performing online retail business is no easy game. To be a smart player in the ecommerce business means beating competitors’ websites with regards to their sales, marketing, and pricing strategies.
Need of Artificial Intelligence (AI) in Pricing Strategy
With a huge number of players contending for buyer’s attention in the market, it becomes mandatory to use AI-based pricing strategy to monitor, track and adjust competitor’s prices. Owing to the complexity of available data, product pricing has become a difficult task. Using AI-driven software helps analyze large sets of product and pricing data accurately and come up with valuable insights that drive critical business decisions. In a bid to optimize prices of niche products, companies need to automate pricing decisions using such customized Machine learning and Artificial Intelligence software. This helps enable price optimization using strategies such as value-based pricing and price tiering. Such smart automation techniques enable profit maximization and thus bring value to the retailers.
Keeping in mind the constantly changing personal needs of customers, spending patterns and buying behaviour, AI helps B2Bs review data such as past transactions, customer information, reviews, feedback and memberships/subscriptions. This helps companies to perform customer segmentation, identification of customer value drivers to enable dynamic product pricing.
Predictive AI helps companies carry out effective, real-time price optimization by tracking local market conditions and performing competitive intelligence. Customer segmentation will not only enable retention of niche buyers but also helps companies in product upselling and revenue maximization. However, ethical use of customer data and prevention of legal hacks are the challenges that online retailers face while using AI-driven software.
Choosing the Right Pricing Solution
Choosing a pricing solution that is a step ahead of other competitors in the market is key. Some solutions provider offer an AI-driven, patented pricing optimization software that helps their clients compare and analyze products and prices globally from thousands of websites with the highest level accuracy of 99%. Such a software is based on smart, crawling technology that offers high, real-time data refresh rates and plug-and-play APIs with zero integration to reap high return-on-investments (ROI).
Their tailor-made pricing solution seamlessly integrates with your internal systems and helps you quickly implement the price optimization strategy to proliferate your business. You get the liberty to choose the number of SKUs, retailers, marketplaces and ecommerce websites, set predefined rules, and monitor competitor prices at the zip code or global level at a rate of every 10 seconds every day. Above all, it presents you with a high-level visibility through a unified dashboard to simplify your price optimization decisions.
Quoting Amazon’s exemplary success in the ecommerce business in the past two years, it becomes inevitable to keep leveraging on your existing success through competitive repricing instead of staying content with past successes. Moreover, adapting existing pricing strategy to not just stay in the game for the sake of gaining a competitive advantage but also to maximize profits makes sense in the long run. And choose a pricing solutions provider that effectively help you achieve that!
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