Minnesota-based tool and equipment supplier Northern Tool + Equipment will use retail pricing and analytics company Revionics’ artificial intelligence (AI)-powered solutions for pricing optimization, promotions, markdowns and competitive intelligence as part of a new partnership.
Family-owned Northern Tool + Equipment has sold its products through direct channels, online and in 120 retail locations across 22 states for 40 years and has more than 100,000 tools ready to ship.
Revionics, an Aptos company, uses AI algorithms to adjust prices as consumer demand, local conditions and other factors change. Revionics will help Northern Tool + Equipment utilize a pricing approach that allows them to respond faster to market changes and opportunities through targeted promotions, markdowns during product lifecycles and competitive pricing trends.
“Retail pricing is both an art and a science,” said Aptos CEO Pete Sinisgalli. “In today’s fast-paced and highly competitive retail landscape, retailers cannot afford to have science missing from the equation.”
Certainly, Northern Tool is not the only company turning to AI for help with its pricing schemes, especially in light of continued inflation as reflected by the rising consumer price index, which includes housing costs, food, energy and sales of other goods.
Matthew Pavich, managing director of global strategic consulting at Atlanta-based price optimization platform Aptos, told PYMNTS that rising inflation presents an opportunity for more retailers to utilize AI and price optimization software.
The adoption of AI and price optimization technology across the retail industry, he said, is mainly based on retailers’ ability to process changes. The speed and the amount of available data and how it’s being processed will continue to increase, said Pavich.
The biggest hurdles to using AI and price optimization software are organizational willingness and operational constraints, he added — if a retailer requires humans to put price signs on shelves, that slows their ability to react to price optimization data.