Otto’s supply and category director spoke about the “incredible results” it had working with predictive data analytics firm Blue Yonder.
German fashion retailer Otto’s director of supply and category management, Michael Sinn, said Otto had seen “dramatic improvement in margins, sales and return rates” by using Blue Yonder’s dynamic pricing technology.
The technology supplier, founded in 2008 by Professor Michael Feindt, uses data and history from its retail partners to dynamically price merchandise in real-time based on factors including product, size and colour.
Otto reported double-digit growth in its sales and margins since using Blue Yonder’s technology, with strong increases from its womenswear lines.
The supplier’s dynamic pricing does not exclusively reduce prices on Otto’s website, and Sinn said it had increased the prices on some of its items “without impacting sales”.
This may seem counter-intuitive, which Feindt said demonstrated the superiority of data over human decision making.
The technology supplier’s founder said “data-driven decisions are better than human decisions”, adding that 99% of all of retailer’s business decisions “can be automated”.
When asked about the effect this shift would have on the retail workforce, Feindt told Retail Week it would lead to a shift in skills in the industry and retailer’s would have to upskill their existing employees.
He said: “At the very least you’ll become more efficient – it is clear that the many decisions are not optimally made in retailers at the moment.
While this shift is skills could lead to a loss in jobs entry-level retail employees, Feindt was adamant that investing in data and personalisation was essential for retailers.
“I am 100% convinced that data will drive the next big wave of digital innovation and that retailers that do not invest now will not survive,” he said.
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