- Four reasons why sales are ignored
- How do customers react to promotions?
- The search for the right price
Four reasons why sales are ignored
- The abundance of promos all year round. In recent years, the arrival of new promotions have appeared, drowning out the sales among other recurring promotions with strong price discounts such as private sales, destocking operations, large sales... Recently, other promotions from the United States have been massively adopted as unbeatable promotions. Who has never heard of Black Friday or Cyber Monday? These promotions were initially focused on 1 or 2 days, but distributors, exhilarated by their performance, decided to extend them to the week. Competing with all these promotions, the sales have been shortened to 4 weeks in 2020.
The meaning of prices without promotions. Consumers are asking themselves more and more questions about the meaning, or even the legitimacy, of certain prices without promotion because of the abundance of promotional prices that usually become the real prices they expect to pay for a product.
The search for the best price is very time-consuming. Whether in store or on the web, and despite the help of price comparators that often only take into account a few comparison factors, the race for the best price is time-consuming.
The "consom'action effect". This trend has appeared over the last 5 years and aims to make the consumer responsible for his purchases. Customers now express the idea that they can vote with their shopping cart by choosing to whom they will give their money, which naturally impacts the effectiveness of certain promotions.
How do customers react to promotions?
According to the price report observatory dating from January 2020, the reaction of customers to -50% items shows that 83% of French people think that retailers' margins are very / too high. They agree at 76% that the initial price has been increased to be able to reduce it later while keeping a comfortable margin.
This feeling shows that the impact on the price ratio is significant and makes planning promotions more and more complicated.
The search for the right price
So how do you choose the right price when :
- the volumes of variables and parameters are exponential, internal resources are limited?
- the data history is incomplete or difficult to transpose from one year to another?
Predictive models operated by artificial intelligence and machine learning simplify this decision-making process. These technologies are likely to significantly improve the customer experience and the brand image of the retailer. Now, pricing strategies can be refined and streamlined with the help of machine learning rather than outdated standard statistical models or intuition.
