With online shopping, consumers no longer want to buy at full price. They have the leisure to find the best price by going around the various online shopping sites. According to the report "New Retail Ecosystem: from disrupted to disruptor", 55% of consumers use Amazon to compare prices, and nearly 40% begin their research there. In this context, what is the best strategy for retaining customers?
Knowing that price is one of the most important levers in the retail trade to generate profits, dynamic pricing proves to be a probative solution. Dynamic pricing is the ability to adjust prices in real time according to market demand, consumer behavior, competition prices, available inventories, financial targets, and sometimes even temperature.
Hosting this tool on an online shopping platform is less complicated than you might think. After implementing the automatic Dynamic Price Fixing system, it is a question of using the customer data, coupled with the Big Data, and analyzing them to optimize the prediction of the best price yields on hundreds or even thousands of products available. The application of the models determining the best prices for the customers according to the contexts will then adjust in real time.
In addition to affordability, disrupters are now competing for speed, assortment and convenience. Consumers have indicated that online purchases are not always driven by price: 32% chose convenience as their primary reason for purchasing online. However, on all sales channels, low prices continue to justify purchasing decisions by nearly two-thirds of consumers. A trade that does not adapt will be foiled by its competitors, which leads to loss of sales and possibly customers.
From a Canadian point of view, it is encouraging to see retailers betting on online trade and using dynamic pricing. It would surely help to repatriate Canadian buyers who shop in the United States for bargains; a wave of optimism for our economy here. Canada is still a little bit off the hook for online shopping, but no one will be surprised to know that this trend is growing.
PwC is able to offer sophisticated pricing strategy, implementation and analysis services to help companies maintain their competitive level in a rapidly changing retail industry.
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