Teen apparel retailer ‘gets schooled’ on predictive analytics
By failing to automate pricing and replenishment processes, brick-and-mortar retailers are failing to improve the customer experience.
This was according to data from Blue Yonder, a JDA company, which pointed out that 96% of retailers rely on manual processes for their pricing and replenishment strategies, despite near universal recognition of the benefits that greater automation could bring.
Relying solely on manual intervention to execute critical processes, such as pricing and replenishment, retailers subject themselves to inaccuracies, like not having the right products available or priced at a sub-optimal level, resulting in lost sales. The good news is retailers are ready for a change.
A majority (90%) of companies plan to increase or maintain their physical store presence, as well as innovation. On average, retailers plan to invest 36% of their IT budgets in new technology, such as artificial intelligence (AI) to meet the demands of customers and prepare for the future of retail.
Half of companies (53%) openly admit that there is room for improvement in their replenishment process, while 54% said the same for their pricing strategy. For example, 58% of retailers reported that automated replenishment would generate a better customer experience, and 56% said that automated pricing would result in improved profits.
Intelligent technologies, such as automation and AI, can not only provide insight on pricing and forecast stock levels, they can deliver better replenishment and pricing decisions to retailers. AI solutions can also analyze vast quantities of data to completely automate these processes and eliminate the burden of manual intervention, enabling retailers to devote more of their resources to improving the customer experience, according to the report.
“It is clear that retailers recognize the benefits that automation can bring to their businesses, but perhaps most significant is the agility it gives them to compete with their e-commerce rivals,” said Uwe Weiss, CEO of Blue Yonder.
“Online retailers have been able to make small and regular adjustments to their pricing for years, instantly reacting to consumer demand and trends to keep their prices optimized and maximize sales, while brick-and-mortar retailers have been trying to manage with manually-operated, outdated and static pricing strategies,” Weiss added. “However, with automated pricing solutions, retailers finally have the flexibility and agility to optimize their prices in their physical estate, delivering a better experience for customers and enabling them to compete more effectively with their online rivals.”