AIR Dynamic Pricing by GK

product ranges and complex framework conditions make it virtually impossible

for category managers to guarantee an ideal number for each individual product.

Modern pricing tools such as AIR Dynamic Pricing by GK can automatically adapt

prices to both customer behavior and constantly changing market,

environmental and competitive situations.

AIR Dynamic Pricing automatically adjusts the prices of

thousands of SKUs, including product variants considering all relevant contextual

conditions daily. Streamlined updates of transaction and master data ensure

that price

elasticities and sales forecasts can be modeled in memory and on the SKU level. This is the basis

for permanent up-to-date predictions and a highly performant calculation of

optimized prices.

The main

challenge in price calculation is the product life cycle, especially regarding

the connected sales KPI targets. While finding optimal prices at the beginning of the life cycle is key,

the main two use cases for dynamic pricing lie at the high phase and the end of

the product life cycle:

• Regular Pricing: During the high phase of the

product life cycle and never-out-of-stock items, the AI pricing algorithms

are optimized to increase margins and revenue. The weight of either of

these sales KPIs is controlled by category management via the web

interface. Demand-driven, the AI intelligently adjusts prices to reach the

specified (weighted) average targets across the different product ranges.

• Markdown Pricing: At the end of the product life

cycle, the goal of the AI markdown pricing algorithm is to reach zero

stock by a defined target date. For each item, the algorithm respects the

current demand and controls the sale via price. Considering the current

demand ensures preserving as much margin as possible while avoiding losses

resulting from not selling off in time.

The AI

solution combines given business rules and constraints with advanced machine

learning algorithms. Via an intuitive and user-friendly web interface, pricing

processes can be aligned across all sales channels and locations.

By

automating the pricing process, the workload of the category management is

significantly reduced. AIR

Dynamic Pricing automatically

calculates optimal prices for the entire product range. Nonetheless, category

management can review price recommendations in a half-automated workflow,

especially for customer-focus items such as KVIs. This workflow includes a

reasoning feature, allowing the user to understand the AI price

recommendations. Altogether this enables category management to invest its time

much more effectively by strategically controlling prices and thus achieving

defined target KPIs reliably.