Tom Tailor is using 7Learnings’ AI-based solution to optimise pricing, initially in its online store. The project was presented today at the EHI Technology Days in Bonn by Fabian Bode, Analytics Manager at Tom Tailor, and Eike van Hettinga, Founder and CCO of 7Learnings.
By implementing the predictive pricing system, the fashion retailer aims to make its pricing strategy more dynamic based on data analysis and AI. The solution analyses product data, transaction history and external factors such as competitive behaviour and seasonal influences to calculate optimised prices for products.
“With the new solution, we can make our pricing more efficient and data-driven,” explains Fabian Bode. “The system helps us to make quick and informed decisions to increase sales and margins.”
From manual processes to automated pricing
Previously, Tom Tailor relied on manual price calculations, mostly done in Excel. However, this method was time-consuming and error-prone. Especially during and after the lockdown, when excess stock had to be sold, the need for an automated solution became clear. 7Learnings’ AI-based solution provides automated price optimisation, which now enables quick adjustments in real time.
In a proof of concept test based on sales on the German Tom Tailor website, the predictive pricing system was applied to around 20,000 items. Initial results show a 14 per cent increase in sales and a 5 per cent improvement in contribution margin, the margin after fulfilment costs.
Outlook and further integration
Following the successful test on the German website, Tom Tailor plans to extend the solution to international markets and integrate marketplaces such as Zalando into the system. In the future, the platform will also be linked to other data sources to provide even more accurate price forecasts.
“We want to extend the solution further and link it to other factors such as marketing costs and price trends to provide even more accurate price forecasts,” says Fabian Bode.
