AI beats gut instinct

Like retailers everywhere, DIY outlets grapple with online-savvy shoppers who are firmly in control, with complete transparency across all channels at every phase of the purchasing cycle. More uniquely, DIY caters to two very discrete shopper segments: the business/contractor professional, who purchases for client projects, and the homeowner or renter undertaking personal projects. Two recent Revionics-commissioned global shopper studies conducted by Forrester Consulting in May and November 2017 yield surprising insights into the perceptions and behaviours of the latter segment. The titles of these studies succinctly summarise the findings: "Understanding Retail Customers' Pricing Expectations and Tolerances" and "Demystifying Price and Promotion".
At a time when the growth of online shopping far outpaces overall retail growth, much attention has been paid to the importance of convenience (buy online/pick up in-store, same-day delivery, etc.) and variety to shoppers. But what really drives shoppers to select you over your competitors? The Forrester research found that consistently across sectors including DIY, discounters, fashion and grocery, survey respondents said price was the single most important factor in determining where they shop, followed in every case by quality - with variety and convenience trailing significantly behind. In DIY, 51 per cent of the respondents, who included shoppers in Germany, France, the UK, Brazil and the USA, ranked price as the most important factor, followed by quality (39 per cent), convenience (30 per cent) and variety (21 per cent). Interestingly, in other retail sectors variety was ranked as more important than convenience. 
And while today's retail is messy, and today's data is even messier with the proliferation of customer data, it's impossible for DIY retailers to keep up with today's shoppers and contractors using simple spreadsheets and gut instinct. It's even worse for DIY retailers, who sell to segments requiring multi-tiered pricing. The good news is that with the data explosion, so too has come the rise of using data science to craft relevant prices where they matter most to shoppers. Unfortunately many retail industry pundits have cautioned that shoppers are suspicious of using pricing that has been created through the use of machine learning science, whereas in reality that could not be further from the truth, as shoppers themselves said. The Forrester studies overwhelmingly flew in the face of that…