The eCommerce Landscape has grown multifold, and so does the percentage of consumers shopping online. A general tendency that is followed online is the price category. Data suggests that a potential customer visits three websites before making a final decision. A slight improvement in the price sometimes contributes to over 10% of the profit and margins.
Just like customers prefer to visit multiple offline stores before making a purchase, Online consumers make the purchase where they get the best deal. As per Shopify’s report, it has been identified that about 74% of consumers make purchase decisions based on pricing. Thus, having a staunch pricing strategy makes the brand stand out from its competition.
These days omnichannel selling is quite prominent thus, offering the best prices becomes necessary. With the rise of Omnichannel retailing, consumers have more options than ever before to buy products, and they are increasingly using multiple channels to research and make purchases. In this environment, eCommerce brands need to have transparent pricing across all platforms. Transparent pricing helps to build trust and loyalty among consumers by making it easy for them to compare prices and make informed purchasing decisions. It also helps to prevent consumer confusion and frustration, which can lead to negative reviews and lost sales. This can build consumer loyalty and encourage repeat purchases.
About Price Intelligence
Price intelligence in eCommerce refers to the practice of gathering and analyzing data about prices, promotions, and other pricing-related information for products and services. ECommerce businesses can use this information to make informed pricing decisions, stay competitive, and maximize revenue.
Pricing strategy help to track prices across different channels, including the brand’s own website and other eCommerce platforms, such as Amazon and eBay. It can also be used to track prices for competitors’ products, identify trends, and detect price changes in real time. The process helps leverage business-related decisions per the current market conditions and trends. Pricing the products after gathering relevant information and the competitors’ prices promotes long-term growth and help you to get an edge over others.
Shoppers look after several factors, such as the brand, company, description, or reviews. Suppose the design and, most importantly, the price fits their budget. That is why brands need to use competitive price and product pricing strategies. This is where Price Intelligence comes out as a reliable solution for businesses to boost their brand sales. This blog emphasizes this technology and how it can benefit your business.
Offering free shipping is one of the most common strategies, but price intelligence is much more than that. The process is complex and requires a thorough market trend analysis, behavior, and price fluctuations. All these factors lead to the creation of pricing strategies.
Importance of Pricing Intelligence Tool
Pricing could be highly complicated if not kept track of properly. Even being a few hours behind a significant price change can result in widespread losses for a corporation.
“Giant eCommerce Marketplace, Amazon constantly monitors its pricing and resets rates every 10 minutes to ensure that it’s the lowest.”
Pricing in the retail industry is critical as it can affect the factors driving sales and profits. Price comparison tools have made customers extremely sensitive to purchasing without evaluating prices online or offline. That is why it becomes imperative to incorporate a reliable pricing strategy and target an accurate set of audiences suited for the process. Listed below are the key highlights that help you understand the importance of Price Intelligence.
- Automating data collection: Pricing intelligence tools automate the process of data collection, making it easier for eCommerce businesses to gather and analyze data on prices, promotions, and other pricing-related information. This can save businesses time and resources and allow them to focus on making data-driven pricing decisions.
- Identifying trends and detecting price changes: Pricing intelligence tools can help eCommerce businesses to identify trends in pricing and promotions and detect price changes in real time. This can help businesses to stay competitive and respond quickly to changes in the market.
eCommerce space is huge; thus, monitoring the price regularly is the need of an hour. Having proper visibility and competitive pricing helps track SKUs across platforms and marketplaces. The tracked data makes it easy to keep track of regulated prices and closing loops for promotional claims. This way, the tool acts as a catalyst for your brand.
Risks the process hold
Before diving into the benefits of Price Intelligence, it is important to look at the risks associated with the process. These risks can impact your business in a number of ways, ranging from revenues to losses if analyzed incorrectly. It goes without saying, that Data can make or break a business, depending on how it is used. Thus, it is advisable to analyze the data professionally and seek training to avoid further inconveniences.
Let us look at the risks that need to be taken care of.
Analysis helps to leverage the price choice and determine the ranking and visibility of the products as well. Being able to rank right at a place similar to your competitors eases the intelligence approach.
- Tracking Unauthorised Sellers and Price Variations
More than just Gathering the data is required; the brand must know about similar products being sold by the competitors. The products need to be evaluated at several parameters like the description, pricing, similarity, differences, and what threat they could pose to your product(s). The evaluation can be done with the help of Automation followed by a human check to ensure that the data gathered is relevant.
Look at how active price variation helped the brand identify major pitfalls, such as unauthorized sellers, and formulate a solid pricing strategy.
- Reading The Data Right
Keeping track of your product’s data along with the competitors’ helps understand and predict the consumers’ buying behavior. The collated data further helps in forming a price strategy and aids the brand in assessing the risks or threats that could be posed by both direct and indirect competitors.
Benefits of Price Intelligence
On average, a customer visits three to four different websites/channels before purchasing. Thus, having dynamic pricing strategies can benefit your business in numerous ways. Moving ahead to the benefits of Price Intelligence and its tool, I have listed some of them to give you a chunk of information on it.
- Increased Profit
Monitoring helps to get an idea about the market prices and provides a better insight into boosting the strategies further. The only way to stand out among the competitors is to price it the way, the product looks more enticing.
You need to use the right algorithms for your product to land on the right markets and websites. Once your product shows up, traffic starts flowing to your website, resulting in better conversions.
You need to display your product to look attractive and leave a positive impression in the consumer’s mind.
- Improved Marketing Efforts & Customer Satisfaction
Price intelligence can also help eCommerce businesses improve their marketing efforts and increase customer satisfaction by providing valuable insights into consumer behavior and market trends.
For example, an eCommerce business can use price intelligence to gather data on the most popular products and search terms in their market, allowing them to create targeted marketing campaigns that will resonate with their audience. By monitoring competitor prices and promotions, businesses can identify areas where they can offer unique value to customers, such as lower prices or a more comprehensive selection of products. This can attract and retain customers, leading to increased customer satisfaction.
- Better Budgeting and Forecasting
An eCommerce business can use price intelligence to gather historical data on competitor pricing, including information on price changes and promotions. This data can be analyzed to identify trends and patterns, such as seasonal fluctuations or changes in pricing strategy.
Understanding these trends and patterns helps eCommerce businesses make more accurate budgeting and forecasting decisions. If the business knows that competitors typically run promotions during the holiday season, it can budget appropriately and plan accordingly.
Additionally, eCommerce businesses can use this data to predict future pricing trends and adjust their pricing strategy to stay competitive. For example, if competitors gradually increase their prices, they can anticipate this trend and adjust their prices accordingly to maintain a competitive advantage.
In this way, price intelligence can help eCommerce businesses to optimize their financial performance by providing them with the information they need to make more informed budgeting and forecasting decisions.
- Improved margins
By monitoring competitor prices, businesses can ensure they are not pricing themselves too low and leaving money on the table and can adjust prices accordingly to optimize their margins.
For example, an eCommerce business that sells clothing may gather data on competitor pricing for similar products and discover that they are pricing their items lower than the market average. They can then adjust their prices to be more in line with the competition while offering competitive prices to attract customers. Similarly, businesses with products with a high margin can use price intelligence to monitor their competition and avoid undercutting. This allows them to maintain high margins while remaining competitive.
Businesses can also identify areas with pricing flexibility, such as products with lower demand or higher costs. They can then adjust their prices accordingly to maximize profits on these products.
eCommerce price intelligence is an essential tool for businesses looking to stay competitive in the fast-paced world of online sales. By monitoring and analyzing the prices of products across multiple e-commerce platforms, businesses can gain valuable insights into market trends, identify opportunities to increase profits, and stay ahead of the competition. With the right price intelligence solution in place, businesses can make data-driven decisions that will help them to increase sales and improve their bottom line.
To level up, businesses should be dedicated to their consumers and stay aligned with the trends. Rather than spending hours on complex manual pricing tasks, Paxcom offers the perfect solution to help you automate the business process. Contact us at firstname.lastname@example.org or fill out the form to learn more about how we can help you draft accurate pricing strategies for your business.