Why Retailers Need to Price Optimize
Retailers need up-to-the-moment information on their competitors’ products and prices to gain pricing insights, identify significant pricing opportunities, and note comparative price distributions and trends. Through the use of ever-sharper competitive intelligence tools and pricing intelligence and analytics, retailers are acting in real-time on the important information about what their competitors are doing.
In fact, research leader Gartner reports that the price optimization market is set to rebound: "Through 2014, investments in price optimization and management software will help increase gross margins, on average, by more than 2%."
By now, the retail drill is becoming more and more familiar:
- Ever-increasing online retail development
- Ever-greater transparency of retailer and shopper information
- Ever-blurring lines between in-store and online-retailing
- Big Data
- Growing uses of mobile and social media
- Burgeoning use of myriad technologies
If you’re still not convinced that price monitoring is worth your effort and investment, consider the following reasons that demonstrate why price monitoring is critical to retail pricing success and profit:
Staying in the know
It's essential for a retailer to know what's happening in the marketplace, not only to have an overview of the market, but to know specifically what products and assortments your competitors have and how they're pricing them.
Also, retailers need to establish their own proper pricing strategy and tactics. To do this, you must know where you stand in relation to others' price strategies. Remember, when it comes to low pricing strategies, retail giants like Walmart can afford to price the way they do because of economies of scale and deeper pockets.
Staying ahead of competitors
Your competitors may also be monitoring their competitors' prices, but you want to lead the way with the most accurate, up-to-date information and action plan. It's imperative for a retailer to know how she/he is priced in relation to competitors.
For instance, a 1% percent difference in pricing might not make a difference, but pricing 10% lower could be the difference in your selling success -- and profit.
Furthermore, retailers have to be more efficient against Comparison Search Engines (CSEs). Since most consumers start with a Google or CSE search, and these search procedures lead the customer to the products and prices they will consider -- and on which they will probably make their buying decisions -- it's crucial to know how to function with and against CSEs.
If you're not in on the search, shoppers are not going to find you, especially if price is the main consideration.
Keeping customers happy
Retailers need to price monitor to find out where they can add value to their products and services. For instance, other than price, what can you offer to appeal to customers versus what others are offering? Consider offerings such as free shipping, returns, promotions, loyalty sales, packaging, customer service, etc.
Competitor price monitoring is the science of gathering intelligent information to help retailers make the right sale, at the right price, at the right time, to the right customer. Retailers have become more market- and competition-savvy than ever before, so it's more important than ever to get their prices and pricing strategy right if they want to survive in business today.
The good news is that competitor price monitoring is affordable, accessible, and expandable to all retailers -- and takes just seconds to get and act on the information you need, in an easy-to-use and easily understandable form. It's pretty important when competitor price monitoring marks the difference between getting a new customer and making a sale -- or not getting a chance to sell your products in today's ultra-competitive eCommerce marketplace.