Retail Sales And Pricing
One of the main drivers of retail sales is the pricing. Dynamic pricing reduces inventory buildup as well as boost sales. As Online retail came along, the trend shifted because people value time and health. Conventional retail stores got crushed recently. The conventional power distribution lines are facing the same issue with the advent of solar panels. What can the conventional brick and mortar stores do?
Solar panels have been around since 1970’s at the least but the prolonged innovation has led to decrease in pricing. While conventional retail stores relied on the footprint of the consumer to their stores. As the footprints are dropping, its time to rethink the strategies once again. Online stores like Amazon were building infrastructure to deliver the products within a day, it opened up lot of competition among the producers & retailers. Lack of innovation is what killing the brick and mortar stores. Where are the consumer? They are in social media and they’re looking for better products that can solve their problems.
People are spending more time on mobile phones than TV. People are having conversation about products they used! At this point retailers need to listening to them. Human behavior is characterized by the ability of the product to alleviate the problem. Pricing impacts all behavior that’s why more people buy during Black Friday Sale.
In a connected world, coupons can spur a lot of traffic to the store. Trends have changed, so retailers need to adjust to the online sales and focus on social media marketing to reduce the operational cost. 3-D Printing and automation can help reduce the outsourcing cost since the products can be manufactured in house. Self driving trucks can cut down the travel time significantly.
Technology is advancing so fast in marketing, Amazon Echo is a cheap marketing play now, small businesses can register their stores because very soon most of the homes will have Alexa. Facebook ads are incredibly cheaper when compared to Commercial television ads. There are ton of white spaces where the marketing cost is literally zero.
Machine learning algorithms can forecast the supply and demand, this would help in adjusting the supply chain, inventories, resources, predict sales, customer traffic, pricing, offers and coupons, production line, logistics, warehouse, raw material and so on. Regression models can set a dynamic pricing to the products to stay ahead of fluctuation and unseen events.
Coupons have a considerable impact on the buying pattern of the consumer. It influences consumer behavior because everyone is in the market to buy products when the pricing is right. Coupons could generate sales which wouldn’t have happened had the pricing remained the same because people won’t pay the price which they have allocated their money for other purpose. Once the prices decrease, it becomes viable for people to use the money to buy extra one or have a new one. Machine learning could generate coupons based on past consumer behavior and set dynamic pricing to induce sales. This approach leads to reduced inventory buildup.
Old school market research: People are having conservation about their problem and the product they have used prior in social media. It’s a great way to analyze the mindset of consumer and make appropriate products which the consumer would buy.
Voice is the next big platform, Amazon Alexa is rocking with it’s skills. It’s great marketing play, if you’re a business then create a Alexa skill based on the product you sell. Location based searches, local shops, restaurants, bars, doctor appointment, shopping, etc are all added on to Alexa. It has opened up whole new stage for businesses to jump in thereby bringing value to consumer. Marketing in Alexa is going to be really low cost for while until everyone joins in. AI is gaining the momentum and it’s capabilities to make businesses efficient. Amazon is allowing voice clips to be added to every Alexa skill. First mover gets all the advantage in a trend changing world.
Retailers need to focus on Online stores, social media presence, Artificial Intelligence, Amazon Alexa, VR, Blockchain, Self driving trucks, 3D Printers and integrating them in to the business if they wanna gain advantage over others. Amazon is doing it, while other retail stores aren’t doing it.