Price intelligence has become inevitable nowadays to gain significant success in the competitive world of eCommerce business. Price plays a vital role in determining whether a business will succeed or fail.
As per Shopify’s Future of Commerce Report 2022, more than 70% of potential customers search and compare prices on multiple platforms to get the product at the best price.
Thus, implementing an effective pricing strategy helps businesses to gain more customers, increase profit, and gain competitive advantage. Price intelligence helps businesses build transparent pricing policies to reduce customer confusion and increase the consumer retention rate.
Let’s take a look at what price intelligence is, why it is important, and how you can apply it successfully for your e-commerce business growth.
What is Price Intelligence?
Price intelligence is a process to track, monitor, and analyze competitor pricing strategies and unfold market trends. As a part of competitive intelligence, this process enables businesses to understand the influence of pricing particulars and customer sentiments to make data-driven pricing decisions and stay competitive in the landscape.
Price intelligence is not just about deciding the product prices and relaxing. It delivers key data insights from multiple data sources and empowers stack holders to optimize pricing strategies effectively to gain long-term growth and enhance brand reputation. Contrary to the traditional price monitoring methods, this dynamic process provides real-time price change alerts to make profitable decisions swiftly.
How to Implement Price Intelligence Efficiently for Better Growth?
To get better and scalable business growth, it is very important to implement price intelligence effectively. Following are the steps that can assist you in setting up the process.
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Identify Competitors
Find out your core competitors who offer products similar to yours. Your competitors can be local businesses, online retailers, or eCommerce platforms. Identifying similar sellers will help you effectively set E-commerce pricing intelligence.
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Adopt the Perfect Pricing Intelligence Tool
Monitoring competitor prices across the landscape in an old-fashioned way can be time-consuming and error-prone. This can be resolved with the adoption of an automated pricing intelligence tool. AI-based solutions will provide real-time data of competitors with 99.9% accuracy. Select the appropriate tool for scraping prices from competitor platforms as per your data requirements to make accurate business decisions in a quick manner.
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Develop an Effective and Dynamic Pricing Strategy
To beat the competition and increase business growth, you need to build efficient pricing strategies for your products. There are many pricing strategies like cost-plus pricing, value-based pricing, economy pricing, etc. With dynamic pricing strategies, you can respond accurately and swiftly to demands to engender more profit via pricing workflows. An accurate and effective e-commerce pricing strategy will enhance customer experience, improve business profit, and upscale the overall brand image.
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Set Up Real-Time Alerts
Set real-time price alerts to get notifications when there is an alteration in a competitor’s product price. These alerts will help to adjust your prices in a quick time and prevent to loss of potential customers.
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Monitor Customer Sentiments
Monitor customer reviews and ratings of your products as well as of competitors. This data provides key insights regarding what customers think about products. Utilize these valuable suggestions to improve your product prices and gain a competitive advantage.
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Monitor Result and Adjust Process Accordingly
Every pricing strategy has an expiry date. Market conditions, trends, and customer preferences keep changing, and businesses need to alter strategies accordingly. Price intelligence allows you to monitor all the important aspects and provide key data insights to optimize your pricing strategies.
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Continues Enhancement
Continuously utilize E-Commerce pricing intelligence to get the latest data insights across the landscape. Use data visualization and data dashboards to analyze the collected data and optimize overall pricing strategy to boost business growth.
How Does Price Intelligence Solution Work?
- Discovery of Product Pages
In this first phase, the pricing intelligence solution will identify and locate product pages on targeted competitor platforms. With the scanning and crawling process, the solution searches for the required information. This information can be related to product names, product details, images, prices, offers, and more.
- Matching the Information
As soon as the product pages are identified and the information scanned, the solution uses algorithms to ensure whether the information collected is the exact match with the product or comparable. Executing this process ensures that only relevant and precise comparisons have been done for the products on multiple domains.
- Data Extraction
After successful identification and accurate comparison, the solution extracts important information from the targeted domains, databases, or other online sources. Data scraping covers data fields such as product price, shipping details, stock availability, discounts, ongoing offers, and more. Here the data can be extracted in a well-structured format with the help of APIs.
- Data Quality Test
Scraped data will be stored in the database for data accuracy tests. Here, pricing intelligence solutions make sure that the extracted data is fresh and reliable to utilize for analysis and decision-making processes. Here data quality is constantly maintained through continuous data monitoring, validation, and cleansing processes.
- Reporting and Analytics
Once the extracted data is validated, it is transformed into actionable insights. Data reporting and analytics tools help users visualize and analyze the delivered data for pattern identification, ongoing market trends, available opportunities, and more to make effective data-driven decisions.
Benefits of eCommerce Price Intelligence
Price intelligence delivers ample benefits to online retail businesses. Let’s have a look at the significant advantages of pricing intelligence.
- Increase Sales
Price intelligence helps keep an eye on competitors’ price changes and build effective strategies. Optimize prices to stay on top of the “Comparison shopping engines”; this will help to enhance business visibility and audience reach and boost traffic, which will eventually result in more sales.
- Profit Enhancement
Contrary to the fixed margin earning, price intelligence implementation can be a game changer. Monitor competitor prices across all SKUs in real-time and adjust your product price and offers to beat the competitors and gain maximum profits.
- Target Vast Customer Segments
Identify what is the maximum price customers can pay for particular products and competitor prices. Price intelligence helps to build a dynamic pricing strategy to target varied customer segments with diverse prices.
- Clear Old Stock
Running with the trend is very important in any online retail business. Once a trend is vanished, you can suffer a loss for the unsold product stock. Pricing intelligence assists in identifying nearly out-of-trend products where you can offer attractive discounts to clear the stock and reduce the margin of loss.
- Effective Marketing and Better Customer Experience
With effective pricing intelligence implementation, a business can know competitors’ marketing strategies and their advertisement expenditures. This will help to build effective marketing planning and optimize ad revenue for products.
By offering lower prices in comparison to competitors, you can attract more customers and maintain a retention ratio. Getting good products at economical prices will surely improve your customers’ experience.
- Optimized Budget and Better Future Predictions
Collecting historical data related to competitor prices, changes in the price, promotion tactics, customer purchase patterns, and more helps predict future trends.
This data also becomes helpful to identify how competitors are spending on product promotions and marketing campaigns. Optimize your budget during holidays and special seasons by analyzing this data.
Real-World Examples of Successful eCommerce Price Intelligence
- Walmart:
One of the world’s biggest supermarket chains adopted price intelligence to offer and maintain its “Everyday Low Price”. With the help of price intelligence software, the company can monitor competitor prices across the landscape and serve its customers with the most competitive prices. eCommerce pricing intelligence helps Walmart to enhance its reputation and gain a loyal customer base.
- Best Buy:
With the use of pricing intelligence, BestBuy can beat the competitors by offering great prices for electronic products. With the help of machine learning algorithms, the company monitors and analyzes competitor prices, reviews, ongoing trends, and more. Real-time price change alerts help to alter its product price quickly to enhance profit.
- Amazon Kindle:
When Amazon launched the Kindle, it kept the device price at the lowest point in comparison to competitors. This strategy helped Amazon to attract readers to adopt new technology in a significant manner and gain great market share to emerge as a market leader.
- Gillette:
Penetration pricing strategy helped Gillette boost the sales of Mach3 razors. By selling the product at a lower price at the entry level, Gillette successfully attracted a huge number of customers. The company earned noticeable profits through huge sales of razors and disposable blades. Once it has a loyal customer base, the company could raise the prices of products and continue to earn profit.
- Xiaomi:
One of the largest smartphone manufacturers adopted a penetration pricing strategy to make its place in the landscape of smart devices. By introducing a feature-rich smartphone at the lowest price, the company was able to get a huge number of customers overnight. Pricing intelligence helped Xiaomi to gain a noticeable market share quickly to become one of the top smartphone-selling companies.
Conclusion:
In conclusion, we can say that e-commerce Price Intelligence is essential for online product-selling businesses to survive and grow in an extremely competitive landscape. Nowadays, businesses need to keep an eye on competitors’ progress to gain business advantage. Automated price intelligence solutions help e-commerce and retailers stay ahead of their competitors and enhance profit by providing vital data information related to products, prices, customer sentiments, and more.
Adopt the price intelligence solutions today and apply suitable pricing strategies to boost sales, income, and market share. We at X-Byte provide effective eCommerce Price Intelligence Services to help businesses set up suitable pricing strategies for continuous profit earning and growth.
Connect with us to nurture your pricing strategies.
