How Does Product Price Monitoring Aid in Better Retail Decisions?
A version of this Blog was first published on the Linkedin Pulse.
Price differences in the competitive retail world are inevitable and extremely dynamic. With the ever-changing market pattern, some product prices might undergo a series of price changes several times throughout the day. Price monitoring helps retailers verify their prices in the market and offer attractive offers to the customers, generating maximum profit. Price monitoring aids in evaluating the price policy efficiency to improve profitability in a business.
Retailers strive to differentiate themselves from the rest as consumers become more value-driven and impatient. Some focus on price, exclusivity, and incentives, while others emphasize innovation and customer service. Some retailers apply a combination of these strategies.
While consumers may find tremendous value in using price comparison websites to find the products they want at the most competitive prices or with the most attractive incentives, retailers must accept that they need to monitor their competitors as often as possible to capture as much consumer spending as possible.
Price Monitoring - A Brief Understanding
Price monitoring can serve a variety of purposes for different organizations. Retail organizations can make use of this data on a micro level to differentiate their products where pricing is extremely competitive. By understanding price and promotions changes quickly, businesses can make quick adjustments to their strategies.
In addition to being extremely useful on a micro level, pricing data is also very valuable on a macro level. It is possible to identify inflation or market changes by monitoring a select basket of goods. Redistribution of resources may be necessary based on these findings.
Retailers can identify changes in pricing quickly and take appropriate action after gathering pricing data using price tracking software. Furthermore, price tracking provides insights into (historical) market trends to help a business anticipate and understand market trends.
Implementing a Price Monitoring Analytics System
The world of retailing has undergone a dramatic change over the last few decades instead of the development of e-commerce, digitalization, and a shift in the shopping paradigm. Research suggests that retail revenues are set to hit a 5.4 trillion USD benchmark by the end of 2022, from 4.20 trillion USD in 2020. However, for brick-and-mortar retailers, many of whose products are also available online, this study poses concern as a changing marketplace makes it increasingly difficult for them to compete. While retailers are much aware of the present shopping tendency of the customers, they often are unsure about their response to this specific behavioral function.
The worst approach to this tendency is implementing pricing decisions in a vacuum without any price monitoring. Thus, efficient price monitoring results in putting a substantial impact on improving overall business productivity and revenue generation. Hyperautomation in the retail industry allows the right pricing strategy that can boost the bottom line and help bring new customers in whereas a bad pricing strategy can result in losing hard-earned sales and be devastating for a business.
Steps to Implement an Effective Price Monitoring Analytics System
- Set up a Market Positioning: Market positioning forms the basic component of a price monitoring strategy. It allows a retailer has an insight into the pricing model that is going to be implemented. Market positioning places a brand at a specific point instead of various factors like product quality, geographical location, and brand value. Market positioning goes beyond brand propositions to a more comprehensive concept called Brand DNA.
- Identify Competition:The next step in defining price monitoring strategy includes specific lists like:
In contrast to lumping all competitors into one list, granular lists that target different types of competition can yield much more actionable data.
- Similarly positioned competitors.
- Top competitors.
- 'Different' positioned competitors.
- Brand 'foils'.
- Study the Products for Monitoring: Huge retail companies like Walmart, Amazon, etc have dedicated and sophisticated algorithms for effective price monitoring data analytics. With hyperautomated monitoring tools and technologies, setting up a price intelligent tool becomes much easier.
- Test the Pricing Data, Identify Potential Threats and Adjust the Price Monitoring Strategy: Efficient automated systems allow a retailer to confirm the practicality of the pricing strategy and identify potential pain points that are necessary to attend to. Tweaking and evaluating data regularly aid in keeping the data fresh, updated, and relevant to gain maximum advantage.
Price Monitoring for Improving Brand-Retailer Relationships
A deep analysis of the macro and micro trends in the global pricing model is an asset for businesses and organizations irrespective of their size. With automation emerging as an indispensable way to maximize the efficiency of business operations, let us investigate some ways businesses gain the competitive edge when it comes to brand retailer co-dependency.
- Defending Against Price Wars: Marketplace price wars can result in product listings being lost, advertising not being accepted, and buy box placement not being available. With efficient marketing monitoring, a retailer can adopt strategies for a stable pricing model for stable growth without getting tangled in unwanted price wars.
- Defining Margins: In order to stay competitive with stable profitability, businesses need to be prepared while discussing margins with resellers and retailers. Regular product analysis and price data tracking provide insight to formulate a concrete pricing model, defining the best of both worlds for a calculated decision.
- Price Tracking for 3P Sellers: 3P service providers, with no direct relationship with a business play a vital role in inflating price wars. This results in the key retail partners losing out on sales and profits, hampering the brand retailer relationship.
An automated price tracking software can come to aid by informing any unwanted third-party intervention to prevent an unwanted price war.
- Providing an Attractive Business Partnership: An automated price tracker helps in improving brand health and protects the bottom line while attracting new retail partners. Price tracking tools and software also help in providing an overview of the retail sector already working in the territory to avoid potential price competition.
- Maintaining the Image of the Brand: Fair pricing plays an important role in a customer's buying tendency. Customers tend to evaluate a brand based on the perceived value offered by the brand.
Record low prices can often have a negative impact on the buyer. Price tracking tools aid in maintaining the brand reputation. It allows businesses to take immediate action against potential threats and improve retailer and customer loyalty.
- Monitoring Competitor Prices: A business needs to understand the evolution of product prices in a competitive market. Competitive price monitoring helps a brand to decide its next course of action at any stage keeping in mind to benefit the customer base. Regular price monitoring allows a business to decide on new prices to provide good value.
Ways to Leverage Price Monitoring to Increase Consumer Base
A few use cases for a better understanding of how automated price monitoring helps businesses gain deeper insight into specific market areas.
- Market, and Product/Commodity Monitoring: Track the prices of products, services, and commodities based on a specific area or multiple locations.
- Competitor Price Tracking: Monitor the prices of competing goods or services at selected retail outlets.
- Price Verification: Make certain the brands' pricing is correct at retailers worldwide, including promotional efforts.
- Retail Price Benchmarks: Premise Contributors can assist develop price trackers and establish benchmarks against the suggested sales price by visiting a subset of all retailers regularly, allowing for price compliance analysis.
- Evaluating Economic Stressors: Monitor distinct pricing factors in specific places using automated techniques and software that might indicate economic stress early.
- Inflation Tracking: Examine items and commodities for signs of inflation, or track trends in inflation within specific regions.
- Pricing Indexes: Hyperautomation can produce high-quality and more cost-effective pricing indexes to assess price changes over time by using fewer observations while producing the same findings.
Developing a competition pricing monitoring plan can provide a business with strong data that results in assisting in making their products and services more appealing on a larger scale in the global market. To get there, a business needs to explain its brand strategy, identify rivals worth watching, and apply the correct pricing monitoring tools.
To succeed, any organization needs to include timely and reliable data into its operations from the start. Obtaining real-time price information may substantially assist in informing strategies and driving business decisions that would otherwise be impossible.
JK Tech has established itself as a market leader in providing complete automation services. Based on our considerable experience adapting and operationalizing automation, we guarantee a perfect retail analytics strategy and solution. Increase the competitiveness of your brand with customized retail analytics services!