Once upon a time, merchants based their pricing on gut feel and experience, others used eyeball analysis to price appropriately. Then came the Internet and the resulting proliferation of online merchants, products and price changes.
Suddenly, pricing was more transparent and more dynamic than ever. Gut feel and experience were no longer sufficient to get pricing right – merchants needed informed, scientific, and predictive analytical guidance to ensure pricing precision.
Merchants today are asking for better analytics and tools to help inform their pricing decisions. They realize that prices are visible to consumers – giving their customers a significant advantage by allowing them to compare products and pricing instantly and on demand. No longer are consumers forced to drive from store to store in search of the best prices. And they understand that their online competitors are using dynamic pricing actions to grab market share.
As a result, merchants have to be smarter, faster and flexible. They need tools that tell them more precisely when to discount, when to promote, and when they can dare to increase prices. More than ever, they need Revenue Management analytics and capabilities. And in the old days when merchants resisted these types of analytics, today merchants are asking for these resources and tools.
By adopting Revenue Management and implementing predictive analytics using big data, companies have equipped merchants to segment their customers, predict consumer response to pricing changes, and to optimize pricing at every moment across thousands of products.
Sure, a gut check still comes in handy in the business world from time to time. However, for savvy merchants, nothing beats a price check from a state-of-the-art Revenue Management capability.