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Adopting a dynamic AI price optimisation model to encourage retail customer engagement

Author

Listed:
  • Platt, Steven Keith

    (Quinlan School of Business, USA)

  • Block, Martin Paul

    (Medill School of Journalism, Media, Integrated Marketing Communications, Northwestern University, USA)

Abstract

Technology innovation, changing consumer preferences and behaviours and competition compel successful enterprises to embrace change. Nowhere are these pressures more acute than in the retail industry and, in particular, for those engaged in the sale of fashion merchandise. As this paper will demonstrate, customer engagement (CE) strategies that leverage artificial intelligence (AI) afford retailers the ability to connect with customers in unique ways. The paper focuses on an AI optimisation model that was built for a fashion retailer. The objective was to build a demand prediction price optimisation model to increase margins realised on the clearance of fashion products. While our discussion will focus on that work, we also present techniques whereby such a model can be employed by CE enthusiasts in their businesses. More specifically, we advance that our model can enhance a company’s CE efforts as a method by which it enables a collaborative customer/company value creation system.

Suggested Citation

  • Platt, Steven Keith & Block, Martin Paul, 2023. "Adopting a dynamic AI price optimisation model to encourage retail customer engagement," Journal of AI, Robotics & Workplace Automation, Henry Stewart Publications, vol. 2(2), pages 184-195, December.
    • Handle: RePEc:aza:airwa0:y:2023:v:2:i:2:p:184-195
    as

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    More about this item

    Keywords

    customer engagement; artificial intelligence; demand prediction; price optimisation; retail management; retail promotion;
    All these keywords.

    JEL classification:

    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • G2 - Financial Economics - - Financial Institutions and Services

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