What: Retailers are adopting AI-driven pricing strategies to navigate inflation and meet price-conscious consumer demands during the 2024 holiday season.

Why it is important: As inflation continues to impact consumer spending, AI tools help retailers dynamically adjust prices, optimise promotions, and maintain profit margins, which are crucial for success in an increasingly competitive market.

To navigate rising economic uncertainties and inflation this holiday season, retailers are turning to advanced AI-powered pricing strategies to attract price-sensitive consumers. According to Prashant Agrawal, CEO of Impact Analytics, pricing will be a critical factor this year as consumers look for value while managing tighter budgets. Retailers are relying on dynamic pricing and targeted promotions to strike a balance between driving sales and maintaining margins. AI tools, such as machine learning and image recognition, are enabling retailers to better analyse customer behaviour, regional trends, and product performance, allowing for more personalised offers and efficient inventory management.

Rather than traditional blanket discounts, retailers are encouraged to implement a more nuanced, flexible approach, applying smaller, strategic markdowns throughout the season. AI also allows retailers to adjust promotions based on real-time data, ensuring that they can respond quickly to market conditions and customer preferences. This data-driven approach is expected to help retailers optimise their pricing strategies and boost profitability during the holiday season, a critical time for sales.

Retailers turn to AI to manage pricing pressures this holiday season