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Real-time pricing: coming to a store near you.
Personal shopping is on the brink of taking on a whole new meaning. The advancement of mobile technology and the information held on individuals' shopping histories means product prices could soon adapt as shoppers walk up and down their supermarket aisle.
Gone are the days of retailers only being able to actively manage the price of a small number of products once a week. Algorithmic pricing and real-time competitive pricing data allows the changing of product prices on the fly.
Amazon is at the forefront of such "real-time pricing" initiatives, which have traditionally been the preserve of online-only retailers.
However, brick-and-mortar retailers in the US are showing their UK counterparts the limitless possibilities when it comes to dynamic pricing.
Independent consumer electronics retailer Abt Electronics pipes competitive pricing data gathered by Dynamite Data into its point-of-sale systems to allow staff to negotiate prices at the point-of-sale, according to Dynamite Data chief executive Diana Schulz.
Meanwhile, another one of Dynamite Data’s unnamed clients uses electronic shelf labels and re-prices every product in their stores each morning based on the prices of its rivals.
The ability to change prices dynamically is not simply the preserve of all-powerful brands such as Walmart or Target either.
Schulz explained that her company has "seen these types of technologies in both large and mid-sized retailers" despite the "investment in technology and competitive data that is typically needed".
Back in the UK things are not quite as close to a Minority Report-style personalized shopping experience.
Even online-only specialists Shop Direct and Ocado claim they do not engage in real-time pricing, while those that do heavily use real-time data to adapt their prices such as the airline brands are reluctant to discuss the issues.
EasyJet declined to comment when contacted because of commercial sensitivities around discussing pricing-related issues.
Grocers Tesco, Asda and Sainsbury’s have all claimed they do not engage in real-time pricing, with the latter two both citing the logistical difficulties in aligning such a strategy across their physical stores and online presence.
A Sainsbury’s spokesman claims real-time pricing would result in "chaos", while an Asda spokeswoman saying such a strategy would be a "nightmare".
Yet, despite such a negative perspective from UK brands, experts are confident real-time pricing will arrive on these shores sooner or later.
Simon Spyer, a partner of VCCP data arm Conduit who began his career working on the Sainsbury's Nectar business, believes the UK will begin to see "more and more" of matching rivals’ prices dynamically, particularly in the grocery and electrical sectors.
He explained that real-time pricing is likely to affect "anything where the product is largely commoditized" and in instances where the only way retailers can differentiate that product is by "being really keen on price".
As it stands the major barrier for implementing "real-time pricing" in-store is changing the prices to match the online price, a hurdle that could be removed by the electronic shelf labels being pioneered in the US.
Schemes like Tesco Price Promise and Asda Price Guarantee already use real-time data to 'price match'In the UK various retailers have dipped their toes into the water when it comes to electronic shelf-labeling including a Nisa Local store in Shrewsbury that launched a trial in August last year to carry out automatic pricing and timed promotional updates, alongside QR codes and meal deals.
Tesco has also experimented with electronic labeling on various occasions with trials in 2006 and 2008, but the retail giant has yet to combine real-time pricing with its electronic labels.
Spyer claims "the capability is definitely there both online and offline – it is whether there is a business rationale for investing in it".
However, with major UK supermarkets lacking a pressing reason to implement real-time pricing, that investment may be slow in arriving, argues Kaye Coleman, the founder of price consultancy Ripe Strategic.
Coleman explains: "The supermarkets already do price matching – it is not so sophisticated but price matching is already happening".
Schemes including the Tesco Price Promise, the Asda Price Guarantee and the Sainsbury’s Brand Match currently use real-time data to "price match" by offering money off the next shop.
A cynic could argue the supermarkets should knock money off at the till rather than relying on customers to redeem their vouchers at the next shop, but such an action could hit the companies' bottom line.
The growing sophistication of mobile marketing is also likely to revolutionize the way brands approach their price matching.
"If you can come up with a value proposition where I check-in [on my mobile] when I walk through the store for the first time and that presents me with a personalized experience based on my purchase history then I could see the benefit for a customer and a retailer," said Spyer.
The trick for retailers is persuading customers to adopt such behavior, but the offer of being delivered ever-changing personalized price offers and messages in-store is a compelling proposition.
Personalization is already a priority for retailers. Sainsbury’s uses anonymized shopping data gathered from the Nectar card to personalize offers.
The levels of personalization offered by Sainsbury’s are increasingly complex. If a female customer buys folic acid they will be sent promotions on other pregnancy-related supplements during the pregnancy period and offers on nappies further down the line.
UK retailers are sure to keep a close eye on developments over the Atlantic, with Schulz claiming she knows of clients that are piloting technologies that enable in-store personalized discounts.
The challenges on the high-street mean there will inevitably be more casualties, but real-time pricing does not have to be the sole preserve of online-only retailers.
Innovative ways of manipulating real-time data could be the shot in the arm the high-street retail industry so desperately needs.
This article was first published on marketingmagazine.co.uk
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Harnham have partnered with The Charter School North Dulwich as corporate sponsors of their ‘Secret Charter’ event. The event sees the south London state school selling over 500 postcard-sized original pieces of art to raise funds for their Art, Drama and Music departments. Conceived by local parent Laura Stephens, the original concept was to auction art from both pupils and contributing parents. Whilst designs from 30 of the school's best art students remain, the scope of contributors has rapidly expanded and now includes the work of local artists alongside celebrated greats including Tracey Emin, Sir Anthony Gormley, Julian Opie, and Gary Hume. In addition to famous artists, several well-known names have contributed their own designs including James Corden, David Mitchell, Miranda Hart, Jo Brand, Jeremy Corbyn, and Hugh Grant. The event itself, sponsored by Harnham and others, will be hosted by James Nesbitt, and will take place at Dulwich Picture Gallery on the 15th October 2018. You can find out how to purchase a postcard and more information about the event here.
17. September 2018
Data. It’s what we do. But, before the data is read and analysed, before the engineers lay the foundation of infrastructure, it is the programmers who create the code – the building blocks upon which our tomorrow is built. And once a year, we celebrate the wizards behind the curtain. In a nod to 8-bit systems, on the 256th day of the year, we celebrate Programmers’ Day. Innovators from around the world gather to share knowledge with leading experts from a variety of disciplines, such as privacy and trust, artificial intelligence, and discovery and identification. Together they will discuss the internet of tomorrow. The Next Generation of Internet At the Next Generation Internet (NGI), users are empowered to make choices in the control and use of their data. Each field from artificial intelligent agents to distributed ledger technologies support highly secure, transparent, and resilient internet infrastructures. A variety of businesses are able to decide how best to evaluate their data through the use of social models, high accessibility, and language transparency. Seamless interaction of an individual’s environment regardless of age or physical condition will drive the next generation of the internet. But, like all things which progress, practically at the speed of light, there is an element of ‘buyer beware’, or in this case, from ‘coder to user beware’. Caveat Emptor or rather, Caveat Coder The understanding, creation, and use of algorithms has revolutionised technology in ways we couldn’t possibly have imagined a few decades ago. Digital and Quantitative Analysts aim to, with enough data, be able to predict some action or outcome. However, as algorithms learn, there can be severe consequences of unpredictable code. We create technology to improve our quality of life and to make our tasks more efficient. Through our efforts, we’ve made great strides in medicine, transportation, the sciences, and communication. But, what happens when the algorithms on which the technology is run surpasses the human at the helm? What happens when it builds upon itself faster than we can teach it? Or predict the infinite variable outcomes? Predictive analytics can become useless, or worse dangerous. Balance is Key Electro-mechanical systems we could test and verify before implementation are a thing of the past, and the role of Machine Learning takes front and centre. Unfortunately, without the ability to test algorithms exhaustively, we must walk a tightrope of test and hope. Faith in systems is a fine balance of Machine Learning and the idea that it is possible to update or rewrite a host of programs, essentially ‘teaching’ the machine how to correct itself. But, who is ultimately responsible? These, and other questions, may balance out in the long run, but until then, basic laws regarding intention or negligence will need to be rethought. Searching for a solution In every evolution there are growing pains. But, there are also solutions. In the world of tech, it’s important to put the health of society first and profit second, a fine balancing act in itself. Though solutions remain elusive, there are precautions technology companies can employ. One such precaution is to make tech companies responsible for the actions of their products, whether it is lines of rogue code or keeping a close eye on avoiding the tangled mass of ‘spaghetti’ code which can endanger us or our environment. Want to weigh in on the debate and learn how you can help shape the internet of tomorrow? If you’re interested in Big Data and Analytics, we may have a role for you. Check out our current vacancies. To learn more, contact our UK team at +44 20 8408 6070 or email us at firstname.lastname@example.org.
13. September 2018