Case studies/Causal AI Case-Study
Price elasticity on comparison platforms.
E-commerce · 2024
Challenge
The growing influence of comparison portals forces online retailers to optimise pricing using competitor and customer data. Classical forecast models fail to predict customer behaviour under price changes.
Solution
Expert knowledge and algorithmic causal discovery were combined to build a directed acyclic graph (DAG) of demand. On that basis, a causal AI simulated different pricing scenarios.
Impact
The drivers of customer behaviour on comparison platforms were understood, and the pricing strategy was optimised for maximum profitability.