In the first part of our article series “5 reasons why you should abandon manual repricing”, we illustrated to you that the advantages of an automated software solution far outweigh human capabilities. In particular, we dealt with why it is barely feasible to manually record price data from a time and cost perspective. Today, we would like to outline the special roles taken by your quantities of both products and competitors. Two further reasons why it is virtually impossible to perform manual repricing.
#2 Your competitors are becoming ever more and ever better
The barriers to market entry in eCommerce are very low, since online shops are based on standardised technologies. The latter thus presents no further explicit competitive advantage. Because of the generally accessible communications and sales structure of the internet, market entries are associated with relatively low costs.
In a highly competitive market, online retailers inevitably have to contest every week with ever newer competitors. Amongst retailers, there is a large amount of overlap between the products being offered and therefore being interchangeable. This implies that you have already too many competitors to be able to observe each individual one and ever more still continue to emerge. Only with the help of automated repricing tools can you withstand this competitive pressure by using optimised price-setting, with which you adjust your prices to your own market conditions.
Retailers are gradually discovering the success of repricing for themselves
The competition in online retail is becoming increasingly intense, since ever more retailers are discovering the advantages to themselves of automatic repricing. As a result, the fluctuation of prices in eCommerce is becoming increasingly wider. In particular on platforms such as Amazon, Check24, Conrad and Otto, repricing activity occurs at a very high degree. Around 12% of all shop operators exploit the opportunities of automated repricing effectively, in that they perform at least 1,000 price adjustments per month. To remain competitive amidst these rapid price alterations, a technical solution becomes inescapable. Since many retailers presently leave the advantages of such a practice still untapped, you, through an early implementation of automatic repricing, can secure for yourself further competitive advantages.
#3 You have too many products to keep pace with all price alterations using manual repricing
The more products you have, the more time it costs you to record the price alterations of your competitors. If you only sell niche articles, then you may perhaps still have the chance of maintaining oversight using manual repricing. In the normal instance, however, to record all price alterations by your competitors, you have to begin virtually anew every time, once a competitor has adjusted the price of a product. Since your competitors also adjust their prices to market conditions, this requires a continuous updating of prices. As a consequence, you then become entrapped within a continuous loop of price observation.
There are no realistic possibilities of remaining manually informed of the price alterations of every competitor for all of your products. Using automatic tools for price optimisation, on the other hand, you enjoy constant overview of the prices of your competition in only a short time expended.
Because of the multitude of competitors you encounter in eCommerce and the enormous amount of product overlap, it is impossible to remain successful over the longer term with manual repricing. In the next article of this blog series we will be describing more precisely why the volumes of data in pricing are unmanageable and how you can increase sales and margins with automatic repricing.
Would you like to learn more about how to remain competitive with the help of automated price optimisation software? Here you can download our whitepaper on the topic of “Price Optimisation for Online Retailers”.