Why are retailers choosing AI pricing tools?
04/23/2025 - Artificial Intelligence
Persistent inflation, fierce competition and increasing omnicanality are redefining retail. Retailers must make smarter, faster and more agile pricing decisions to stay profitable and competitive. AI pricing tools are no longer a space-age option - they have become an essential strategic advantage.
A McKinsey report from 2023 revealed that the adoption of AI tools in retail had grown by 25 % year-on-year since 2020 and that it was showing no sign of slowing down. This evidences a clear trend: sector leaders are relying on advanced technological solutions to optimize pricing.
But why now? And what tangible benefits are seen by those who have already taken this step?
The complexities of retail pricing
Retailers today have to manage prices in extremely dynamic conditions:
- High stock rotation, which means prices must be constantly adjusted.
- Thousands of active references - especially in categories like food, fashion or electronics.
- Multi-canality – consumers expect consistency and competitiveness on physical and online channels.
In light of this situation, pricing directly impacts profitability and brand perception. An incorrectly adjusted price can damage margins or erode consumer trust.
What is an AI pricing tool?
An AI-powered pricing solution, like Reactev’s AI Pricing Engine, uses advanced algorithms and automated learning to analyze data on the market, competitors, and consumer behaviour in real-time. These tools differ from traditional methods in that they learn constantly and adapt automatically.
Their key functionalities include:
- Constant analysis of market and competitor data to detect relevant changes.
- Dynamic and personalized pricing adapted to the elasticity of each product.
- Advanced segmentation and rules make it possible to apply different strategies according to the channel, location or category.
As against a rule-based strategy, these tools do not need predefined fixed rules for each scenario. AI identifies patterns that escape manual analytics, and proposes optimal prices with an explainable logic, avoiding the black box effect.
Key benefits for retailers
Adopting AI pricing tools generates an immediate positive effect for retailers that decide to implement them.
- Faster and more agile: automated decisions independent of manual cycles.
- Optimized margins: by adjusting prices based on elasticity and competitors’ strategies, turnover is maximized without losing volume.
- React pro-actively to competitors: identify price changes in real-time, with instant responses.
- More effective promotional strategies can be achieved by identifying which products can be reduced without hitting overall margins. Find out more: AI-driven promotions or how to improve customer retention.
In this other article, learn more about the Benefits of Artificial Intelligence-based Pricing.
Real use cases of AI-based pricing in retail
Artificial Intelligence is already transforming pricing in many sectors.
- Supermarkets: AI is used to adapt prices to local competitor behaviour in real-time, guaranteeing competitiveness without putting margins at risk.
- Fashion: the product’s life cycle is optimized and offers adjusted according to demand, stock and price sensitivity.
- Electronics: omnichannel strategies are integrated to ensure prices remain aligned in online and brick-and-mortar stores, with price changes based on availability and stock rotation.
- DIY A well-known DIY retailer uses Reactev to set optimal omnichannel dynamic prices.
What are retailers looking for in an AI-powered pricing solution?
Over and above the algorithm, retailers especially prize three key factors:
- Scalability: a platform that can handle thousands of SKUs across multiple markets and channels
- Integration: fluid connectivity with ERP, eCommerce and BI tools.
- Explainable algorithm: it’s crucial that pricing teams understand and can justify automated pricing decisions.
An intuitive and collaborative interface allows pricing teams and businesses to use the tool easily, pushing towards cross-departmental adoption.
Conclusion: AI-powered pricing in retail is here to stay
In a context where every penny or cent counts, and speed is key, AI-powered pricing tools deliver a significant competitive advantage. It’s not a passing fad but a natural evolution in price management.
With solutions like Reactev’s AI Pricing Engine, retailers are proof-positive that AI-powered pricing increases profits, reduces risks, and speeds up strategic decision-making.
Still managing your prices manually? The future is already here - and sector leaders have lost no time in making the most of it; book a demo.
Category: Artificial Intelligence
