Dunnhumby has launched a machine learning-powered tool which allows brands to forecast a year’s worth of sales based on different pricing and promotion scenarios.
The Tesco subsidiary today launched Revenue Growth Planner in the UK, which uses two years of transactional data across billions of customer baskets and a “powerful machine learning algorithm” to predict how changes in base price or discounts and special offers would impact a product’s future fortunes.
“The reality of the consumer packaged goods market today is that even the slightest alterations to price or promotional strategy can have significant consequences for sales and loyalty,” said Alex Reynolds, global proposition manager for pricing solutions at Dunnhumby.
“We designed Revenue Growth Planner to give brands clear, trustworthy insight into the short and long-term implications of their go-to-market strategies,” he added.
The tool also accounts for alterations to both pricing and promotional mechanics “to avoid double-counting their impact” the company said, and can assess how likely it is that a change in the price of one product would cannibalise sales of competing items.
The data behind the tool is updated weekly and takes account of seasonal and holiday-related sales variances.
“With consumer behaviours changing rapidly due to continuing economic challenges, it allows brands to experiment with pricing modifications in a virtual environment before setting them live,” Reynolds said.
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