In this article we discuss the impact of digitalization on pricing and explain why parcel and freight carriers must adopt new pricing methods and technology.
In the digital age, data is ubiquitous, and everything changes very quickly. These mere observations lead to two imperative changes for pricing:
- Speed: quotes, which often require several days of preparation, must now be completed within minutes. Most importantly, instant pricing becomes essential for digital channels such as e-commerce platforms and marketplaces.
Accuracy: average pricing methods are no longer relevant given the variable and ever-changing market conditions. Fixed prices are replaced by differentiated and dynamic prices.
This last change implies a dramatic increase in the number of pricing decisions that can no longer be managed by human experts. Automation is essential, but rule-based pricing is a sub-optimal answer. Data-driven dynamic models are required to continuously adapt to the market.
The first step is to create a data mart to support pricing decisions and data-driven price optimization models.