Idea in Brief
The Problem
The ability to use AI to change prices frequently online and in physical stores has become critical to competing in retailing. But even retailers who have built such computer models take an overly limited approach.
What Retailers Get Wrong
They try to match or undercut competitors’ prices without taking into account whether rivals are out of stock or other factors that drive consumers’ purchasing decisions.
The Solution
Build and implement computer models that analyze historical sales data, capture crucial patterns, and consider not just competitor pricing but also product availability and customer behavior to recommend optimal prices in real time.