Omni Talk Retail Podcast Summary
Episode: Build Profit & Boost Loyalty? Learn Why Both Are Possible With AI Powered Pricing | Ask An Expert
Release Date: February 20, 2025
Hosts: Chris Walton & Anne Mezzenga
Guest: Matt Havich, Senior Director of Strategy and Innovation at Revionics
Introduction: The Power of Pricing in Retail
The episode opens with co-hosts Chris Walton and Anne Mezzenga setting the stage for an insightful discussion on the pivotal role of pricing optimization in the retail industry. Anne reminisces about a compelling story from Chris's tenure as a district manager at Target, highlighting the significance of pricing labels in driving sales.
Notable Quote:
Anne Mazinga (00:08):
"You and listeners are going to love, love, love this session because I'll never forget one of your stories from way back."
Real-World Insights: Chris Walton’s Target Anecdote
Chris shares a memorable experience from his time managing twelve stores in Colorado. He recounts instructing a team member to reposition a price sign on the floor, emphasizing that proper promotion labeling can boost sales by 20% to sixfold.
Notable Quote:
Chris Walton (01:09):
"… any time we took a promotion, sales were going to go up at least 20% to sometimes as much as six times or more."
Guest Introduction: Matt Havich from Revionics
Anne introduces Matt Havich, bringing his extensive background in retail and his current role at Revionics into focus. Matt elaborates on his journey from growing up in retail to leveraging AI for price optimization, underscoring Revionics' mission to help retailers achieve optimal pricing strategies through advanced AI solutions.
Notable Quote:
Matt Havich (04:05):
"… our goal is to really help them have the right price for their consumers at all time and really help them implement their strategies in a way that's meaningful for them."
The Complex Landscape of Modern Retail Pricing
The conversation delves into the complexities of today's pricing environment. Matt explains how the advent of online price comparisons, inflation, and shifting consumer behaviors have intensified the competition, making real-time pricing optimization more crucial than ever.
Notable Quote:
Matt Havich (07:13):
"You have the most competitive era ever in pricing."
AI-Powered Pricing Optimization: A Game Changer
Matt discusses how AI-driven pricing strategies enable retailers to dynamically adjust prices across various channels and products. He highlights the importance of data-driven decisions to balance margins and enhance price perception without compromising profitability.
Notable Quote:
Matt Havich (06:10):
"Pricing optimization is whatever channel, whatever store, whatever customer. You know, it's base, it's promo, it's markdown, it's those TPRs."
Return on Investment: Pricing Optimization as a Vital Investment
Anne brings up the cost concerns associated with implementing pricing optimization technologies, especially in low-margin sectors like grocery retail. Matt counters by presenting pricing optimization as a high-ROI investment that not only boosts profits but also enhances customer experience by aligning prices with consumer expectations.
Notable Quote:
Matt Havich (12:10):
"Pricing is important to customers. It drives value, it's a high ROI investment."
Enhancing Customer Experience Through Strategic Pricing
The discussion emphasizes that effective pricing strategies improve price perception, thereby attracting and retaining customers. Matt shares success stories where retailers using AI-driven pricing grew their market share and outperformed competitors by maintaining favorable price points during inflationary periods.
Notable Quote:
Matt Havich (15:14):
"It's about using the analytics to say these are the products that matter most to customers based on what the data is saying."
Managing Complex Pricing Dynamics and Guardrails
Matt outlines the necessity of establishing guardrails within AI systems to prevent unfair pricing practices. He explains how setting rules ensures that AI recommendations align with retailer strategies, maintaining ethical pricing and avoiding detrimental price points.
Notable Quote:
Matt Havich (19:35):
"Having all these rules in place is important. And then because it's so complex and there's so many moving pieces, you think about a do it yourself retailer…"
Centralized Pricing Operations: A Strategic Imperative
Chris and Matt discuss the benefits of centralized pricing operations within retail organizations. Matt advocates for a centralized approach, where dedicated pricing teams work closely with merchants to leverage AI tools effectively, ensuring cohesive and strategic pricing across all categories.
Notable Quote:
Matt Havich (31:07):
"You're really the everyday hero to their merchant. Think about things like vendor negotiations."
The Future of AI in Retail Pricing: Innovations on the Horizon
In the concluding segment, Matt shares insights into future innovations in AI-powered pricing. He anticipates the widespread adoption of electronic shelf labels (ESLs) and the integration of conversational and agentic AI, which will further streamline pricing adjustments and enhance real-time decision-making capabilities.
Notable Quote:
Matt Havich (33:07):
"We've layered in gen AI and Gen AI enables retailers to talk to their data. So you can really quickly type in a question that says you know, which of my competitors follow me down…"
Conclusion: Embracing AI for Sustainable Retail Success
The episode wraps up with Chris expressing gratitude towards Matt for elucidating the multifaceted role of pricing optimization in retail. Matt encourages listeners to connect via LinkedIn or visit Revionics' website for more insights, reinforcing the critical role of AI in shaping future retail strategies.
Notable Quote:
Matt Havich (35:35):
"Pricing's an amazing place. It's where you want to be right now. You know, consumers care about it. Tariffs are coming. A lot is happening."
Key Takeaways:
- Pricing Optimization is Crucial: Proper pricing strategies can significantly impact sales and customer loyalty.
- AI Enhances Decision-Making: AI-powered tools enable real-time, data-driven pricing adjustments across diverse retail channels.
- High ROI Investment: Investing in pricing optimization yields substantial returns by aligning prices with consumer expectations and market conditions.
- Ethical Pricing Practices: Implementing guardrails within AI systems ensures fair and strategic pricing, maintaining consumer trust.
- Future Innovations: The integration of ESLs and advanced AI technologies will further revolutionize retail pricing strategies.
For more information on AI-powered pricing solutions and to connect with Matt Havich, visit Revionics or reach out to him directly on LinkedIn.