Systematic price observation on the Internet has, for various reasons, now become indispensable. Firstly, no other factor in the process of purchase decision is as important as the price. For 80 percent of all consumers, price plays the decisive role in online purchase and also determines between purchase itself or migration to the competition, who are always just one click away. For another thing, consumers have never been as well informed about the prices of online retailers. In the age of digital information technology, research through a variety of price comparison portals has long since become the norm. Every third person compares prices on the Internet before buying.
As a result, the demands upon online retailers are increasing, since they find themselves under intense competitive pressure due to increased price transparency on the Internet. This elevated price consciousness among customers pushes companies towards an ongoing price adaptation. And so pricing has now become a highly relevant business strategy.
Online price observation: Always keep an eye on your competitors
In light of increased price consciousness among customers, orientation towards your competition is an important starting point for price-setting. To remain competitive longer term, online retailers have to be more rigorously orientated to the market. Particularly for online retailers active at highly frequented marketplaces like Amazon and eBay, price observation becomes especially important. For the most part, only the cheapest of providers can successfully sell there. This is the juncture where price observation on the Internet meets challenges that make a systematic survey of competitor-pricing obligatory.
Online prices, after all, are subject to rapid alterations. The pricing carousel often revolves so quickly here that price trends within the market setting become barely noticeable to retailers. The more competitive the market, the more frequently the prices change. Sometimes the prices in one online shop can change even within a single day, such as the marketplace giant of Amazon, for example. Over a million price alterations in one day are no rarity there. Prices thus appear in endless quantity upon the eCommerce skyline and require selection to be able to evaluate them for individual pricing strategy.
Retailers resort to various procedures in their quest towards price observation. 80% of companies explore competitor data manually. Among the automated methods available are SaaS (Software as a Service) and local software solutions.
In manual price monitoring, individual solutions to competitor observation have been developed which are overseen by employees engaged especially for this purpose. If only a few competitors or a limited product line are to be monitored, then this works relatively free of problems with the essential know-how. If numerous online shops were to be queried, however, the outlay in personnel and financial resources would then increase disproportionally. Above all, it is the retrieval of large data volumes – as well as inconsistent naming of manufacturers, products and features – that make manual price observation virtually impossible.
Gain competitive advantages using automated tools for price observation
To actually make the endless volumes of online data valuable, innovative technologies are called for which can efficiently process prices and product data. Intelligent software solutions address the problems of dynamic eCommerce markets, thus allowing for an automated collection and association of competitor data.
The advantage of automated tools lies primarily in their significantly higher update frequency. A systematic detection of current and valid competitor-pricing allows for an immediate reaction to price alterations by the competition.
Since only a few companies use standardised systems for price optimisation, there still exist some deficits within price optimisation in online markets. A minor adaptation of price alterations of the competition by online retailers, for example, thus illustrates that by no means all users tap into the potential of Internet data analysis. In the United States and Great Britain, only about 13-18% of prices are set depending upon the competition.
In view of upward price consciousness among consumers, price observation of competitors and analysis of their pricing strategies are becoming increasingly essential in ensuring the competitive capacity of online shops. Only those having an overview of the large volumes of data on markets, competitors and products and then applying this for their own individual use will enjoy longer term success in eCommerce. Innovative solutions, such as the self-learning Retail Intelligence Suite of blackbee, provide the essential transparency here. These facilitate a sensible pricing and product-mix strategy, whereby markets and competitors are extensively monitored and trends become apparent.
Are you still seeking a fitting solution to price observation on the Internet? Test blackbee now and convince yourself of our innovative technology!