We are now in the midst of the peak buying period (October-December). It’s undoubtedly an important time of year for all retailers. Traditionally, it’s a time of heightened sales around the holidays that has consumers flocking to their devices or the storefront. But for some retailers, the majority of their revenue is made during this time, which means that the life and death of their business is largely dependent on their success during these few months. The challenge is that many retailers have got into the habit of trying to draw attention to themselves through offering deep discounts to customers during this period – making the climb back from red to black (i.e. back to profitability) even more challenging.
So, what is sustainable?
When the reality of a buyer switching requires little more than them opening a second tab on their browser to compare pricing, businesses must ensure that the price differential the potential buyer sees is in line with an intended strategy. Businesses are increasingly looking to smart tools like algorithmic approaches to pricing that can enable them to automatically incorporate competitive and market-relevant information into each pricing calculation.
What’s behind the scenes in these price optimisation solutions is a powerful segmentation model that leverages AI, to continually learn and adapt the model to incorporate new information. This includes things such as changing market trends and shifting buyer behaviour. With these capabilities, the model can effectively predict the likelihood of a customer’s willingness-to-pay based on the unique conditions of each buyer transaction – which may change based upon time of day, inventory levels, and buyer loyalty.
Secondly, real-time calculation can help to maintain the harmony of pricing across channels by enabling a centralised pricing source. If customers find themselves looking at a slow, loading website as they wait for a pricing calculation to materialise, it’ll only be a handful of seconds before they’re moving on to a competitor’s site.
Ultimately, a customer experience that is differentiated by meaningful personalisation and reliably fair, market-relevant pricing can significantly persuade a buyer to choose you. When sellers put the effort in to reduce the friction in two key sources of purchase frustration: 1) product selection and 2) pricing, they will be rewarded with the repeat business of loyal buyers that will save them from dependency on ‘peak purchase periods’ – a pitfall that catches so many retailers out.