According to a McKinsey report, ecommerce sales have increased by approximately 25% since the pandemic began, and this trend is expected to continue. Indeed, retailer preferences have changed significantly in favour of online channels. So many analysts expect this surge of consumer behaviour would open up 20- 40 % of companies’ existing market. The coronavirus pandemic has a significant impact on people’s lives around the world in a very short period of time. Additionally, consumer preferences are changing, and the pace of change is accelerating. For years, buyers have been gradually shifting their purchasing habits to digital platforms. Besides that, COVID-19 enhanced the transition to digital commerce, resulting in a more competitive and diverse marketplace than ever before.
Consumer expectations for price transparency continue to rise because of digitalization, according to a study by the Competition Commission of India (CCI). Another study conducted by Ketchum found that COVID-19 changed consumers’ brand preferences by 45%, while a Mckinsey survey found that more than 60% of global consumers changed their shopping behaviour. As a result, brand loyalty among consumers continues to decline. This situation has gotten worse during the pandemic, as personal financial constraints and economic insecurity have increased the importance of price in purchasing decisions. The pandemic revealed gaps in business strategies and highlighted the importance of having an ecommerce infrastructure in place to meet consumer needs and expectations. Out of necessity, the business-to-business(B2B) world went went digital, and consumers took complete control of the purchasing process. Hence, it’s obvious that the customer shopping experience has become the new battleground, and vendors must deliver a seamless, personalised, and consistent experience. This presents many challenges, including an increasingly price sensitive market resulting to changing consumer behaviour, demand variation, assortment variation, and the need to be extremely agile in responding to competitors’ price moves.
In light of the explosive growth of ecommerce, dynamic pricing is quickly becoming a must-have capability to drive growth while sustaining margins. Retailers can gain a significant competitive advantage by learning how to move quickly and provide customized solutions. Dynamic pricing software for ecommerce merchants analyses massive amounts of data in real time to determine if a product is in high or low demand and whether changing the price would result in an increase in sales. After that, the service provider stores the data and uses it to intelligently optimise future prices. In other words, dynamic pricing establishes a positive feedback mechanism in which price adjustments produce sales data, which is then analysed to generate even more precise demand data in the future. As a result, revenue is increased that would not have existed without dynamic pricing. According to a Bain & Company global survey of 1,700 business leaders, 85% of executives believe they need to improve their pricing decisions. However, only 15% of businesses have successful price monitoring tools and dashboards in place. Responding to disruption brought by dynamic pricing, some businesses go much further to efficiently meet customer demands: they leverage Artificial intelligence (AI) to allow dynamic pricing and product recommendations across all distribution channels, resulting in a consistent shopping experience. Businesses that can create a competitive edge through Omni channel marketing and provide this level of customer support can receive absolutely huge benefits.