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Personalized Pricing Technology Holds Huge Promise for Retailers

Personalized Pricing Technology Holds Huge Promise for Retailers


USA What is personalized pricing? It means that customers shopping at the same store are offered different prices on the same items, depending on their predicted behavior - something online retailer Amazon has been doing successfully for years. Using algorithm technologies, offers can be customized at an individual level - a very attractive concept for retailers. Each year, U.S. manufacturers spend upwards of $100 billion on trade promotions and it’s estimated that 70% of these promotions are not effective. Safeway’s ‘Just for U’ program, uses customer loyalty card transaction histories to decide which one-to-one offers to give each customer. Individualized offers are printed based on previous purchases, encouraging increased sales. It's common knowledge that numerous other major retail chains also have loyalty card programs. This data could also be used for similar customized offerings. Another company, Engage3, is taking a forward-looking approach, actually predicting future shopping behavior. This system can figure out who needs a special offer and who does not. If it knows someone already intends to buy the product, the system leaves them alone. In the future, consumers may end up receiving one-to-one offers and customized pricing more often - to the benefit of shoppers, retailers, and suppliers alike. Safeway Engage3
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