JOURNAL ARTICLE

A Step-by-Step Guide to Real-Time Pricing.

  • Published In: Harvard Business Review, 2023, v. 101, n. 6. P. 92 1 of 3

  • Database: Business Source Ultimate 2 of 3

  • Authored By: Fisher, Marshall; Gallino, Santiago; Li, Jun 3 of 3

Abstract

The article focuses on an advanced AI-powered pricing strategy for digital and brick-and-mortar retailers that goes beyond simple competitor price matching by incorporating factors such as product availability, consumer behavior, and price elasticity. It outlines a seven-step process—choosing product focus, building consumer decision models, conducting price experiments, measuring outcomes, optimizing prices, testing with control groups, and continuous improvement—to dynamically set prices that maximize revenue or profit while maintaining margins. Case studies of a large Chinese online retailer and a major U.S. online retailer demonstrate how this approach led to significant revenue and profit gains by tailoring pricing algorithms to different product categories and consumer sensitivities. The strategy emphasizes the integration of data analysis, experimentation, and consumer insights to achieve sustainable improvements in retail pricing effectiveness.

Additional Information

  • Source:Harvard Business Review. 2023/11, Vol. 101, Issue 6, p92
  • Document Type:Article
  • Subject Area:Marketing
  • Publication Date:2023
  • ISSN:0017-8012
  • Accession Number:172762543
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