Price optimisations are a decisive guarantee to success in online retail. In doing so, potentials for revenue growth in particular take up a special position. Hence strategies for strengthening margins and for increasing profits should be carefully thought out and be based upon highly valid data. The higher grade the data is qualitatively, the more precisely changes in the market can be responded to. To remain competitive, intelligent pricing strategies need to be developed and implemented from available data. For this purpose exactly, a high availability of data is indispensable to every online retailer.
“This thing called ‘price’ is really, really important. I still think that a lot of people underthink it through. You have a lot of companies that start and the only difference between the ones that succeed and fail is that one figured out how to make money, because they were deep in thinking through the revenue, price, and business model. I think that’s underattended to generally.” – Steve Ballmer – former CEO Microsoft
Be faster than competitors
In pricing policy, pricing strategies are rarely structured actively. Retailers often react to the related activities of their competitors rather than creating impulses themselves. Proceed proactively for this reason and establish an active price management! Important here is that you precisely examine beforehand which possibilities for price optimisation are available. Define in advance objectives and guidelines for your pricing strategy.
Rely upon highly valid data
The implementation and analysis of the pricing strategy has a special status. Use for this purpose a price control based on key figures. This serves not only control of your success, but also protects you from pricing spirals, whilst simultaneously strengthening pricing knowledge at your company. Ultimately, assertions about price reductions and increases form the basis of your future price management.
In doing so, the implementation of the pricing strategy must under no circumstances take place manually. With the high abundance of competitors and rising count of products, numerous leading retailers use technological options such as blackbee, which has developed strongly over recent years. With the right software and daily analyses, you will thus attain much more reliable results than relying on instinct and gut feeling.
Price optimisation – Customer Success Story with blackbee
blackbee captures price, product and vendor data from the Internet on a daily basis and then evaluates it in a tailor-made way. Our technology enables sensible price and product line management with which you can simultaneously keep your competitors in view and also recognise trends at an early stage. blackbee’s algorithm has been developed over eight years of research and forms the basis for our award-winning product and market analysis.
The client, a pharmaceuticals retailer with an operating profit running into tens of millions of Euros and around 150,000 SKUs, achieves an annual turnover of double-digit million Euros. Until now, they used to adjust their prices manually only once or twice a year due to changing purchase prices. Only a very small range of key articles were manually repriced on a daily or weekly basis. The retailer decided to introduce active price management using blackbee. The targets agreed in the scope of the project were as follows:
- immediately recognise and exploit available pricing potential
- maximise the pricing leverage by actively managing prices
- sustainably improve profits
See how we introduced an active price management for our client with five tried-and-tested steps in our ultimate Online Pricing Guide.
Would you like further information on the topic of price observation and price optimisation with blackbee? We offer you individual and scalable solutions. Contact us now – we look forward to your message.