The fast approaching holiday season presents enormous opportunities for all.

Retailers face both unprecedented opportunities in a season that is expected to see exciting increases in buyer spending in recent years, and unprecedented challenges throughout the supply chain, combined with a rapid changes in the behavior of buyers and competitors. This is all happening in a retail landscape so unrecognizable that the reliable pricing and promotion strategies of previous years are of little relevance.

This season’s winners will adapt quickly, take advantage of advanced artificial intelligence / machine learning (AI / ML) capabilities, and provide customers with choices that represent a clear differentiation in the marketplace. Pricing, promotions and markdowns enter a new era of leverage for winning retailers.

Buyers are more informed – and skeptical – than ever

One of the most notable changes over the past two years has been the rapid adoption of e-commerce across all retail industries and across all demographic groups of buyers. More than 18 months later, the temporary behaviors initially sparked by the COVID-19-related desire to promote social distancing have become habits and preferences.

An August 2021 consumer survey sponsored by CreditCards.com found that 62% of shoppers plan to shop for vacation online. These online shoppers have unprecedented visibility into the price, offerings and availability of every item from virtually any competitor, and they have become extremely savvy in their decision making.

Price-sensitive buyers concerned about inflationary threats carefully examine retailer prices, types of offers and vehicles of offer. Many have personally experienced unreliable turnaround times and will assess the attractiveness of a great deal versus a retailer’s reliability and integrity in timely fulfillment.

What price is offered? What promotions? What targeted offers, coupons, etc. ? Customers will be looking for the best deals. A high price will not necessarily make a customer ignore the availability and reliability / integrity of the retailer, but not presenting the right prices and offers will push fickle buyers into the arms of competitors.

Fortunately, AI-powered pricing and promotion capabilities provide real-time insight into buyer demand signals and price elasticities, allowing retailers to take advantage of stand-alone pricing and promotions for prices and highly targeted offers based on consumer demand.

As distribution chains fade, shoppers will be organized and disciplined to budget and stick to a planned shopping list. Retail chains will need to feature prices and deals on the items that shoppers most interest in, taking a surgically engineered approach that harnesses cutting-edge data science to deliver granular pricing and promotions that take geography into account, channel awareness and cross effects, including halo and cannibalization.

The shopping season starts early, so does building trust

Buyers are shopping earlier than normal this holiday season. Concerns about availability and delayed delivery times are motivating buyers to buy earlier in 2021.

Only retailers who know the price sensitivities of buyers at the granular item level of the store channel can present real-time prices that engage buyers early in the buying journey. Retailers who present shoppers with a price that is perceived to be out of touch with the market risk losing that buyer, not only on the item in question, but their entire holiday shopping experience.

With real-time information that presents price and promotion recommendations based on precise demand signals filtered out of all the noise, autonomous AI-powered pricing enables retailers to offer aggressive pricing on items to which customers want to sell. buyers are the most price sensitive. At the same time, the AI-based recommendations guide retailers to opportunities where margin recovery is possible across the assortment without alienating buyers.

In addition, inflationary pressures affect retailers with unpredictable costs. Autonomous AI-powered pricing and promotion solutions are designed to scale quickly and provide the best recommendations. Retailers don’t have the luxury of spending a month, a week, or even a day manually evaluating a myriad of scenarios. Amazon changes 3 million prices a day – that’s the new order and winners need to develop capabilities that also reach their buyers quickly.

Retail chains must take an integrated view

Chain stores have a unique opportunity to position themselves against their competitors by leveraging an interdisciplinary team approach. A pricing team with autonomous AI-powered pricing and promotion tools can serve as strategic advice to their merchant partners, leverage advanced consumer demand analysis to accurately understand the impact of changes in pricing and promotional offers before they roll out, as well as take in-flight corrections as market, competitor and buyer behaviors change.

The importance of fulfillment integrity during this key holiday season also gives chain retailers an edge if they take a holistic view of inventory across stores, locations, distribution centers and banners. The collaborations of supply chain, pricing, marketing and merchant teams can all benefit from AI-powered demand analysis in their respective disciplines and can present a great competitive advantage.

AI Science Offers Win-Win

The unpredictability of the 2021 holiday season is symptomatic of the drastically altered retail landscape as a whole. Retailers who could trust their instincts, manual spreadsheets, and adjustments to strategies and cadences from last year are quickly losing ground to their more innovative AI-powered competitors.

The good news is that shoppers are embracing and recognizing retailers who take the initiative to deliver stand-alone pricing and promotions that attract and engage them – while retailers benefit from predictable bottom lines, fresh prices and offers. relevant, and a structured business for a long time. success in the long term.

Kevin Sternecker is Chief Strategy Officer, DemandTec