Ahold turns to technology to find the right price
- Ahold USA is deploying Revionics Price Suite pricing technology across its retail banners, including Stop & Shop, Giant Landover, Giant/Martin’s and Peapod, reports FierceRetail.
- The new technology is intended to help Ahold’s stores do a better job of pricing goods, justify investments to help in pricing and improve sales and margin projections.
- “Our [retail] brands will leverage Revionics Price Suite to better align pricing with their customer preferences in their diverse and growing customer base while delivering powerful business impact,” Nick Bertram, Ahold USA’s senior vice president of merchandising, told the publication. "Moving to a true science-based pricing application allows for much better simulation of changes, easier execution, and an infinite combination of strategies."
Price optimization tools can be a critical differentiator for retailers. It enables retailers to deploy dynamic pricing that can deliver higher margins and provide valuable data on consumer shopping patterns. Retailers can quickly gauge shopper reaction to different pricing strategies and reward their best customers with better prices. The ultimate goal from the retailer perspective: bottom-line improvement.
Ahold is not the first to use this type of technology, and it's unlikely to be the last.
Leveraging loads of shopper data and purchase history, among other factors, Amazon uses sophisticated algorithms to change item prices multiple times throughout the day. Now brick-and-mortar retailers are starting to embrace dynamic pricing. Kohl’s, which operates more than 1,200 stores, uses electronic price tags that change multiple times daily, according to The Wall Street Journal. French retailer E. Leclerc uses electronic tags that can change as many as 5,000 times throughout the week. Kroger has tested dynamic pricing in the past and is trying personalized pricing with its new tech-focused store pilots.
Now Ahold USA is deploying Revionics suite of price optimization technology. "Ultimately, the strategy that delivers the best possible prices in a way that allows us to sustain our overall profit goals will lead to better performance and even better prices for our customers," Bertram told FierceRetail.
The return on investment is immeasurable if the new technology helps retailers set prices that not only resonate with shoppers but keeps them loyal. A recent study conducted by Forrester Consulting for Revionics found 78% of consumers agree with the use of science-based technology to determine prices, deeming it fairer than items priced arbitrarily by a merchant’s judgment. The study also found as many as 81% of consumers shop around for the best price.
It’s this kind of statistic that makes it imperative for retailers to take appropriate measures — such as investing in price optimization technology — to make sure they’re right-priced. Otherwise, consumers will flock to a competitor, a loss retailers in today's ultra-competitive environment can not afford.
- FierceRetail Ahold implements new price optimization tool
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