Dynamic pricing is one of the most important instruments in e-commerce when it comes to increasing sales. But how has dynamic pricing so far been used in Do it Yourself, one of the growth markets of online retail? In the blackbee Insights Pricing Report, Webdata Solutions puts price adjustments in the DIY sector to the test.
Whether do-it-yourself videos or garden blogs – Do-it-yourself (DIY) has long been present on the Internet. But the German do-it-yourselfers not only inform themselves online about projects they want to tackle but also buy their equipment via the Internet more and more. The e-commerce market for DIY products has been growing steadily for years: in 2018, sales of DIY items rose by 12.1 percent over the previous year. For 2019, the trade association DIY, Construction and Garden forecasts sales growth of 8.2 percent.
This major structural change calls for long-term price management that can compete with dynamic competition. To what extent do online retailers in the DIY sector take advantage of the opportunities offered by dynamic pricing?
Pricing in German DIY e-commerce – The providers under the magnifying glass
Compared to the three multichannel DYI stores surveyed, Google Shopping is by far the most important place for dynamic price adjustments. However, this is caused by only a minority of vendors on the popular search engine who contribute many price adjustments (see Figure 1). In the four-month survey period, a total of 373 dealers raised their prices very rarely, 404 providers, however, hardly lowered them (1-100 times).
Few providers score with a strategic, active price management. Specifically, smaller multichannel DYI stores and online pure players stand out with their many price changes. In particular, online pure players, i.e. providers that only use digital distribution channels, are particularly successful with such a pricing policy on the Internet. According to the trade association DIY, Construction and Gardening, online pure players generated 50.8 percent of total DIY sales in e-commerce in 2018.
About the blackbee Insights pricing report
For a detailed analysis of price management in the German e-commerce market for do-it-yourself (DIY) products, the Leipzig-based software company Webdata Solutions used its business intelligence software blackbee Insights, to monitor from around May through the end of August 2019 daily price increases and decreases for 900 selected DIY products on the web shops of the three largest German DYI store chains and the online search engine Google Shopping. In total, more than 1.2 million offers were evaluated. The close monitoring of price changes in the dynamic online market for DYI and home improvement products allowed conclusions to be drawn about the price strategies of the types of providers investigated.
This article is an excerpt from the “blackbee Insights Pricing Report: DIY e-commerce in Germany”. The complete report is available on request. Write us a message!