For example, bananas that begin to ripen need to be sold while consumers are still willing to pay for them, but not before a new shipment comes in. Providing discounts to shoppers on products that are still fresh gives shoppers an incentive to buy now. This can even be done on a granular, individual store level, as inventory and consumer buying patterns vary based on store geographies. What this means for customers is that products are available at any time at the best possible price, ultimately leading to less wasted food.
Increase profitability through product affinity
Retailers can also increase profitability by optimizing pricing on products with strong affinity. Analyzing data on products that are sold together, retailers can detect cross-sell opportunities and mark down one product while driving sales of other related products at full price.
As shoppers head to the grocery store for the Fourth of July, retailers can find areas to increase sales with perishable and non-perishable items typically paired together. For example, offering a markdown on cherries nearing their sell-by date, if bought with pie crust, or similarly, full-priced hotdogs and discounted buns.
By linking multiple items, retailers can lower prices of certain products that may have otherwise expired while still increasing the bottom line by ensuring sales of higher-margin items.
Empowering retailers to reduce food waste and better serve shoppers
When a business deploys dynamic pricing, they become more sustainable — both environmentally and financially. But it also has the benefit of generating loyalty among shoppers who receive the best deals and competitive prices. In addition to time-sensitive food, retailers can also see advantages of markdown pricing for seasonal items or products with short selling cycles.
With dynamic pricing driven by AI, retailers gain a holistic view of their entire inventory in real time, as well as the connections between products, and can optimize their strategies on the fly in order to reduce food waste and better serve shoppers.