To remain competitive today as a retailer in eCommerce, one thing above all the rest stands out: Highly frequented price alterations, which you gauge from your competitors. For the majority of customers, after all, price is the most important purchase criterion. The extensive options in price comparison on the internet, provided by platforms such as preisvergleich.de, additionally reinforce price consciousness among customers. Many online retailers have already stepped up to this challenge and are now performing active price management. They rely on automated repricing for regularly adjusting their prices to the current market situation. The most frequent price alterations take place at the major marketplaces like Amazon and eBay. Amazon alone adjusts millions of prices every day.
Despite this enormous quantity of price adaptations, 8 out of 10 online retailers still record their competitor price data manually. But is manual pricing still possible at all, given the countless price alterations to be performed each day by online retailers? What advantages do automated tools offer? And which disadvantages arise from manual price observation? We aim to get to the bottom of these questions in our new article series. We will be underlining five reasons why you should abandon manual repricing.
Today we will start with the first of those reasons:
#1 Manual repricing: Man versus machine
With the enormous volumes of data you encounter while manually searching the web for prices, the probability of making a mistake in this process stands relatively high. Regardless of whether you note an incorrect price from your competition or even mistakenly place a comma, in the complex world of eCommerce there are so many sources for human error. Additionally, success depends strongly upon the analytical skills of the Pricing Manager, which, bitter as it may sound, never remotely approach the precision of a technical algorithm.
Automated repricing saves you time and costs
A further clear advantage emerging from the use of automatic price observation tools is that software performs so much faster. Online retailers already working with intelligent software solutions adjust their prices so often that it would be simply impossible for a human to keep pace with this high frequency of pricing change. In comparison to technologies, a person could never manually record as many products and prices in the set time available. The more products and competitors you have, the more time is expended in altering your own prices. Price adjustments take enormous amounts of time and are performed virtually round the clock by your competitors. For this reason, price alterations also do not fit within the classic nine to five work plan. When using an automated software for price optimisation, you still remain competitive yet can query prices not only faster, but also more frequently.
Last but not least, your efforts in automated repricing then become more cost-oriented. In comparison to the personnel costs you incur for the staff performing manual price optimisation, the costs for employing a technical solution are lower. The time you save here can be used to achieve further competitive advantages for your online shop – through the analysis of trends, for example. Since not every single price change of every single product can be recorded manually, competitive disadvantages can also arise for you here. Due to the elevated price consciousness of your customers, manual price optimisation can result in profit and sales losses, should your competitors be offering a better price.
In summary, the above implies: Intelligent software tools outstrip human capabilities. Manually performed price observations are less effective over the longer term and induce higher costs and losses. Online retailers with an extensive range of products and competitors cannot avoid an intelligent pricing solution. You can learn more on the significance of product ranges and competitors to repricing in the next part of our article series “5 reasons why you should abandon manual repricing”.
In blackbee, we offer you a customised tool for price observation and price optimisation. Test it now and profit from the advantages of an automated software solution.