Smart devices are now an ingrained part of everyday life for many people around the UK, and it is this technology in particular that is transforming the retail industry. Access to the internet and online stores has never been easier, and modern shoppers are now taking advantage of this to make sure they get the most out of their money. Millennials in particular, who have grown up with technology and the likes of eBay and Amazon, are being careful and more strategic to find deals, which is setting a new standard for pricing.
Bearing this in mind, retailers now need to employ new and innovative strategies to reach this modern generation of shoppers. Only then will they truly engage them, leading to increased sales and brand loyalty.
Bargain hunting Brits
Recent research has found that 85% of people will try to find some sort of bargain or discount when shopping, which increases to 95% among 16 to 25-year-olds. In fact, the survey highlighted that we spend 29 minutes, on average, looking for the best fashion deals.
At the forefront of the nation’s bargain hunting are price comparison websites and voucher codes, as half of shoppers will resort to using a comparison site and 41% will use a voucher code, all in the attempt to get the best price possible.
The rise of showrooming
Almost a quarter of millennials admit to making a purchase on their mobile device whilst still in-store, after having looked at and tried on the items they like. The modern shopper now wants a shopping experience where they can look at products and try them out, but also want the benefit of being able to purchase them online and not have to worry about carrying the items home with them. But more than this, the internet has provided us with unparalleled pricing transparency. Unless retailers have their pricing strategy right, based on a competitor’s pricing, they risk losing out.
Know your customer
Thanks to this transparency, retailers now face a pricing conundrum, as too high a price will put off some customers from making a purchase as they will happily buy from competitors if their price is right. With consumers now influencing pricing decisions more than ever, the time has come for retailers to put their gut-feeling to the side and rely on a machine-learning led strategy in order to make the right pricing decisions.
Customer demand changes with regularity, so it is important for retailer to be continuously assessing their pricing to understand how their price changes are affecting customer purchasing. Automated technology systems can give these companies a more scientific approach to this problem, and by using certain variables such as demand, the time of year and the sales history of items, these systems can allow the companies to react to changes in buying behaviour in real-time, ensuring the best price is always available for the customer.
The future of pricing
Buying items at a fixed price is no longer the status quo for shoppers, meaning that dynamic pricing will have an increasingly important influence on the future of shopping. Customer behaviour is changing with the evolution of new technologies and companies need to understand this shifting dynamic and keep up with current technology if they are to remain competitive.
By using data to better understand the customer, and work how how much they are willing to spend on an item, retailers can place each product at the optimum price point for the customer, to maximise sales and profit margin. Retailers that choose to not get on board with dynamic pricing, choose to give their competition the advantage in the price wars.
Markus Juhr-de Benedetti is chief revenue officer at data analytics firm Blue Yonder