Artificial Intelligence (AI) is becoming a bigger part of our lives as the technology behind it becomes more and more advanced. You may not realize it, but most of our every day tech relies on AI, such as smartphones, online shopping, and online banking to name a few. Every industry has a high demand for AI capabilities – especially retail. This is because AI can assist with analyzing data to drive sales, automating menial tasks, or enhancing the customer experience.
Juniper Research, a digital market research company, predicts retailers will spend $7.3 billion on AI by 2022, compared with the approximately $2 billion that was spent in 2018.
One of the ways retailers can take advantage of AI is by using it price products intelligently. AI generated algorithms can provide retailers statistically-likely outcomes of various pricing strategies, allowing them to offer the best promotional deals to increase sales and to make — and keep — their customers happy. Through the collection and analysis of vast amounts of internal and competitor data, AI can help support the optimal pricing decision.
For example, eBay uses AI-powered pricing and inventory algorithms to help sellers determine the most appropriate prices, and Kroger applies AI in a similar way as well. Having this real-time data analysis provides retailers with the ability to stay flexible, as well as to alter prices and other promotions instantly based on insights from shoppers.
As the price is optimized by the AI, price updates can be instantly communicated at the shelf level through Digital Smart Labels. This technology allows retailers to immediately update pricing across multiple stores, unlocking the ability to respond to competitor actions on the fly. Since the number of price changes is limitless, retailers can execute all price changes recommended by their AI.