With a volatile economic situation in Europe, consumers are saving more and spending less. If you want to maximize Black Friday profits, you need to enhance your strategy. In this article, we explain why predictive pricing is the best answer to uncertain markets and how to leverage its power.
Predictive analytics: Get the unfair advantage before it’s the new standard
What are the best products to advertise with major discounts? How much discount is needed to increase sales without cutting margins unnecessarily? In our highly dynamic and complex markets, manual market analyses are less and less effective. As humans, we miss lots of relevant data correlations that could translate into pricing strategies and profit opportunities. That’s even more of a problem today than in previous years, as customers are more hesitant to spend their money, according to the Consumer Confidence Indicator (CCI). Setting the right prices is crucial for success.
How can AI help? AI-driven dynamic pricing solutions use AI algorithms that analyze historical data, such as competitor prices, inventory levels, season, product category and others, to determine price elasticity for specific products at a given time. Predictive pricing solutions go one step further. They take these insights to forecast how your pricing decisions now will affect different business metrics like demand, revenue or inventory. No more guesswork. No more lost profit opportunities.
Benefits of using predictive analytics for Black Friday
Predictive analytics are a game changer for your Black Friday pricing strategy. You can simulate how your pricing decisions will affect sales, revenue and profits, and by doing so easily determine which products to promote and which discounts to set to attract new customers and foster relationships with existing ones. And you can synchronize your marketing spending with your pricing to not sabotage your overall success.
As manual price adjustments are way too slow, especially on Black Friday, predictive pricing software dynamically adjusts your prices to make sure you do not lose one euro in unnecessary discounts.
Last but not least, when you base your Black Friday pricing strategy on predictive analytics, you can simulate how inventory levels will change depending on your campaigns and avoid understock or overstock. No more unhappy customers who don’t get their bargain!
Implementing predictive analytics for Black Friday pricing
It’s a myth that implementing data-driven pricing is time-consuming and cost-intensive. You don’t need to build your own AI solution. With standardized solutions like 7Learnings, you only need a few weeks to get your new pricing up and running.
Data collection and infrastructure setup: Decide on the different internal and external data you want to include to calculate price elasticity. The more data you have access to, the better, but make sure you have decent data quality. Then, establish a robust data infrastructure to store and process this information efficiently. Get rid of data silos to establish a clean data pipeline with APIs that your future pricing solution can use.
Select predictive analytics tools: Be rigorous in your vetting process. Unfortunately, not every AI pricing provider actually works with AI. Make sure the software offers extensive forecasting, covers inventory optimization and all other features you see as essential. Book free demos and consultations, and get a sense of different providers’ trustworthiness (case studies, awards etc.) and ask for details about the integration process. At 7Learnings, we cover the whole technical setup for you, so you get a ready-to-use solution.
Integrate analytics into pricing strategy: Define workflows to make the most of the near-real time predictive analytics you now have at your fingertips. Create routines to check your short term and long term strategy based on predictive analytics. With regard to your Black Friday pricing strategy, set clear goals and use automated price adjustments. Enjoy the results you’ll see.
Predictive pricing is a catalyst for Black Friday pricing success
With volatile economic markets and consumer moods, effective Black Friday pricing strategies need to be more sophisticated than in previous years. Retailers that follow traditional rule-based or competitor-based pricing strategies, will miss out on massive profit potential and will lose out to competitors who already use advanced methods such as predictive analytics.
With predictive analytics, Black Friday pricing can reach a whole new level of effectiveness. AI algorithms are able to pinpoint optimal prices with an accuracy and speed that was impossible to reach until now. The question for retailers is no longer if they use AI, but which tool they trust and implement cost-efficiently. As the most important sales event, Black Friday is a good opportunity to review your own price optimization strategy and bring it up to date. Determined action pays off in any case, because not all retailers have yet implemented AI-based solutions, and the pioneers benefit double.
Why 7Learnings is the best partner to enhance your Black Friday pricing strategy
7Learnings is not the only provider that offers predictive analytics to boost your Black Friday pricing strategy, but we are confident to say we are the best.
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- Our average results are others’ positive exceptions: Our AI-driven predictive pricing solution delivers top-notch results, again and again. 80% less manual effort and more than 10% uplifts in profits are just the average, we’ve seen with customers. With the right strategy, higher results are possible.
- Your AI-driven setup is ready in a matter of weeks: You don’t need to initiate big data projects to improve your data quality before switching to data-driven pricing. Our algorithm is trained to maximize the results of the data you have, and we will guide you through the setup process every step of the way. Minimal effort from your side required.
- Experts recognize the quality of our solution: Our customer base is growing and so is our recognition in the industry. We’ve won several awards, among them the AI excellence award in 2023, Germany’s E-Commerce Award and “Rising Star” of pricing optimization in 2023.
If you want to optimize your Black Friday pricing, get to know 7Learnings and decide for yourself. Watch a free video of how 7Learnings works now.
