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Price optimisation is a business strategy for retailers to seriously consider implementing as it helps them improve margins and streamline the supply chain. But, more importantly, it provides retailers with a tool to make intelligent pricing decisions.
Price optimisation works by using sophisticated computer software to adjust prices to suit existing market conditions, such as, seasonality, in-store promotions, consumer behavior and the like. This software also has the ability to predict and forecast what price is best to charge in these circumstances. Consequently, it can assist retailers in pricing better against the competition.
International retailers such as Walmart, Tesco’s, Kroger and SuperValu are already implementing price optimisation with reported success, using software designed by external service providers like Oracle ProfitLogic and Revionics to name a few.
In South Africa where competition will become even tighter with the arrival of Walmart, the use of price optimisation may give existing retailers the innovative edge over new contenders.
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