Berlin, November 18, 2024 – A joint study by consultancy firm Kearney and AI pricing specialist 7Learnings has revealed that while Black Friday continues to deliver revenue peaks, outdated pricing strategies are costing retailers hundreds of millions in potential profit.

As consumers become more conscious about planning purchases around Black Friday, retailers face a dilemma. On one hand, massive spikes in revenue of up to 200% are recorded on the day, yet only around 7% of these gains translate into additional net revenue for the season due to reduced demand in the weeks before and after.

The report forecasts a staggering €6.4 billion in Black Friday sales across Germany in 2024, marking a 10% increase compared to last year. However, poor pricing strategies result in an estimated €300 million in lost profit. According to Moritz Tybus, Partner at Kearney, this profit can be realized using advanced AI-driven pricing models:

“Retailers who leverage predictive AI pricing can achieve the delicate balance between meeting consumer expectations and maximizing profits. With consumers now making highly targeted purchases, optimizing Black Friday strategies is no longer optional.”

The study highlights various consumer insights:

  • Demand for discounts: While consumers expect discounts between 30-50% off retail prices, the actual reductions often average below 10%. Despite this, 85% of surveyed consumers remain positive about the event, with 90% expressing satisfaction with their purchases.
  • Category trends: Electronics, fashion, and beauty products dominate shopping lists, but categories like cosmetics and sports equipment show disproportionate demand shifts with even minor price changes.
  • Sustainability: While sustainability remains a low priority for 75% of shoppers during Black Friday, e-commerce continues to grow, with two-thirds of transactions happening online.

The study demonstrates that traditional pricing approaches, based on competitor benchmarking, fall short of capturing the full profit potential of Black Friday. In contrast, AI-driven strategies could have generated an additional €740 million in sales last year.

“AI pricing solutions like those offered by 7Learnings empower retailers to make data-driven decisions,” explains Felix Hoffmann, Co-Founder and CEO of 7Learnings. “By predicting demand and consumer willingness to pay, these systems allow retailers to deliver competitive yet profitable pricing, ensuring Black Friday success without sacrificing margins.”

The report also underscores that even a no-discount strategy, while risky, could yield higher profits than poorly executed price cuts. However, the long-term winning formula lies in adopting advanced technologies that fine-tune pricing strategies to align with both consumer behavior and retailer objectives.

 

About the study
The findings are based on extensive consumer surveys and market data analysis conducted in partnership between Kearney and 7Learnings. The study provides actionable insights for retailers looking to enhance profitability and customer satisfaction during the Black Friday period.

Additional resources


About Kearney

Kearney is a leading international management consulting firm with offices in more than 40 countries. Since 1926, we have been a trusted advisor to the world’s largest companies and organizations. Partner-owned, AT Kearney offers its clients dedicated support in solving their most critical challenges to achieve immediate change and long-term benefits.

About 7Learnings

7Learnings helps retailers increase profits by 10% with a SaaS predictive pricing solution. Our machine learning technology accurately forecasts demand for different price points, allowing you to optimize pricing based on your own business goals. The 7Learnings predictive pricing software is a fast and easy-to-implement way to help retailers grow their profits and revenues.

We are always happy to help with media inquiries. Please reach out to us at press@7learnings.com