Intelligent pricing could help to eliminate waste from luxury brands, says Blue Yonder | Retail Times

The recent news that luxury brands have destroyed millions of pounds worth of unsold merchandise to avoid their products falling into the wrong hands and being sold on the “grey market” at knockdown prices, illustrates the challenges that these brands face in matching pricing and customer demand. With Richemont, owner of Cartier and Mont Blanc, and Burberry among those who have implemented these measures, it clear that luxury brands must develop the processes to adjust their pricing models to match demand and maximise sales, while maintaining their brand identity.

This is according to Uwe Weiss, CEO at Blue Yonder, who suggests that the latest technology, such as artificial intelligence (AI) and machine learning, could play a vital role in helping luxury brands to sense key indicators of demand from changing market conditions and data such as sales, promotions, weather and events to set the optimal price.

Uwe says: “The destruction of unsold merchandise not only has a significant impact on a brand’s bottom line, but it also does no favours for that brand’s environmental credentials or PR image. Burberry appears to be taking positive steps to address these issues, with executives announcing plans to reduce the cost of its products in China by 4 per cent, as higher prices in Asian markets had been cited by some analysts as one of the key reasons for the company’s surplus stock. However, there is also an opportunity here for all luxury brands, whatever market they operate in, to take a more refined approach to their pricing than broad price cuts.”

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Intelligent pricing could help to eliminate waste from luxury brands, says Blue Yonder – Retail Times.