In many ways, the correct pricing approach to managing disinflation and deflation resembles the best practices in response to inflation. The foundation to this approach is to focus on your customer to derive the best price image at a time when costs, prices and consumer loyalties are in-flux.

Here are some of the ways winning retailers can thrive in this environment by leveraging AI and advanced analytics: 

• Identify and competitively price your KVIs (key value items); these vary by retailer and market and are essential to winning over customers.

• Drive better vendor negotiations which can lead to better costs, better prices and mutually beneficial outcomes. Knowing how consumers will react to different scenarios enables both retailers and vendors to make informed decisions to grow share profitably.

• Leverage private-label items to enhance your position when negotiating with national brands and also to offer better priced options to consumers at a time when their budgets are tighter and their loyalties are low.

• Eliminate ineffective promotions – for most retailers, a significant percentage of their promotions are ineffective and that margin loss can be better invested into more effective promotions or better pricing on KVIs to win over more customers. Improved priced perception via better promotions can be the difference maker during inflationary (and disinflationary) times – especially when so many top retailers have matching strategies on everyday pricing.