What: Coresight reviews the perspectives of AI in setting up prices.

Why it is important: Decision making tools is of optimal importance to set up prices properly in the age of AI.

The report discusses the impact of artificial intelligence on pricing strategies in the retail sector. Here are the key points:

1. Market Scale and Opportunity:

The global retail pricing optimization software market is expected to each $1.6 billion in 2024, growing at a CAGR of 16.5% between 2023 and 2028. The US holds the largest market share at 51.0% as of 2023.

1. Optimal Pricing Strategies Contribute to Success:

An optimal pricing strategy, which considers both internal and external factors, is crucial for business success. 99% of respondents in a survey stated that having an optimal pricing strategy is either "moderately" or "very" important to determining business success.

1. AI-Informed Pricing Decisions Are Prevalent Among Retailers: 92% of respondents in the survey use an AI-based pricing solution to inform their pricing decisions, and all respondents have benefited at least "slightly" from this solution.

1. Leveraging AI Can Be Cumbersome and Challenging:

Despite the prevalent use of AI in pricing strategies, companies face challenges in leveraging advanced AI-based pricing solutions. The three most widely cited challenges are a lack of integration with key complementary business functions, a lack of trust around AI models, and limited integration capabilities with company-wide solutions.

1. Integrated Business Functions and Real-Time Pricing Amplify AI-Based Pricing Benefits:

The survey revealed that only 41% of respondents have "fully integrated" their price planning strategies with complementary business functions. Real-time pricing also has huge growth potential, with only 56% of respondents currently using it.

1. Outlook on AI Usage and Investments Reveals Upbeat Retailer Sentiment: 97% of respondents plan to increase investments in AI-based pricing solutions in the coming year. The most influential differentiators for choosing an AI-based pricing solution are those that support retailers' integration goals.

The report concludes that retailers who can effectively leverage AI and machine learning in their pricing strategies will have a competitive advantage. Those slow to integrate these technologies risk losing customers to competitors and facing margin erosion.

The use of AI in dynamic pricing