To offer consistent, relevant and personalised prices for customers, retainers need to understand customer behaviours, especially as the path to their purchase decisions becomes erratic across touchpoints. Digital twins — virtual representations of processes, things, environments or people — can simulate behaviour and predict outcomes, including customer behaviour and preferences. Examples include Adidas’ Speedfactory, to improve the quality, speed and overall efficiency of the company’s entire sporting goods product chain. The city of Singapore also has a full-scale digital twin of itself that can analyse future household energy storage.
Adoption of mobile payments and retailer mobile apps also supports the predicted move toward mainstream adoption of real-time in-store pricing. “Many consumers who have downloaded a retailer’s app use it for online purchases; others use it to obtain a coupon or discount offer that they can use in a physical store,” Mr Hetu added.
However, retailers face some customer experience and technology challenges in ensuring that the correct price is accessible in real time. “Retainers need to educate customers in understanding the dynamic nature of pricing, which means that prices can rise or fall unexpectedly. Retailers also need to be better at managing delays in updating over-inventory and under-inventory levels,” observed Mr Hetu.
To manage pricing signage, some retailers are using electronic shelf labels or digital shelf edge technologies. However, for the many that don’t use digital labels, associates must change price labels manually. This is a high-risk source of mistakes and a limitation to the frequency a retailer can adjust prices.
“Retailers must focus on enabling technologies such as a unified retail commerce platform, which uses centralized data for inventory, pricing, loyalty and other information to facilitate a continuous and cohesive experience,” said Mr Hetu.