Systems and methods for price testing and optimization in brick and mortar retailers

A non-transitory computer readable medium storing instructions which, when executed on a computing device, cause the computing device to perform the steps of:

• accessing a set of products offered at a plurality of physical retail spaces;
• generating a set of testing data for the set of products, wherein generating the testing data for a product of the set of products comprises:
• assigning, to the product, a test price, a lower test price, and a higher test price, wherein the lower test price is lower than the test price, and wherein the test price is lower than the higher test price;
• assigning the product at the test price to a first physical retail space of the plurality of physical retail spaces;
• assigning the product at the lower test price to a second physical retail space of the plurality of physical retail spaces;
• assigning the product at the higher test price to a third physical retail space of the plurality of physical retail spaces;
• and
• collecting transaction logs for the product from the first physical retail space, the second physical retail space, and the third physical retail space;
• computing an elasticity matrix for the set of products based on the generated set of training data, wherein the elasticity matrix describes a self-elasticity of each product of the set of products and a cross-elasticity of each pair of products of the set of products;
• updating an elasticity model based on the computed elasticity matrix, wherein the elasticity model is a machine-learning model for predicting a elasticity of each product in the set of products;
• computing new test prices, new lower test prices, and new higher test prices for the set of products by optimizing an objective function based on the elasticity model and a set of constraints for the set of products;
• and
• generating new testing data for the elasticity model based on the new test prices, the new lower test prices, and the new higher test prices for the set of products.