With retailers reducing store numbers and investing heavily in their online business, it is imperative that they know exactly what the competition is charging for products.
The Daily Telegraph’s retail journalist Harry Wallop recently wrote how Sebastian James, the new boss of Dixons Retail, said the high street will no longer be the place where consumers do their shopping, as he announced further closures of the company’s town-centre shops across the UK. Dixons Retail has been closing stores for the last few years; it announced a further reduction in store numbers from 557 high street shops to about 400. “This will leave the company with just thirty or so shops in town centres,” wrote Wallop.
The Independent on Sunday reports how Tesco has shocked rivals with its U-turn on UK store openings. “Tesco has taken the ‘unprecedented’ step of shelving advanced plans to open UK stores, as the grocery giant focuses on improving its estate and opening smaller stores,” wrote Jamie Thompson. Meanwhile, US-based retailer Best Buy has just announced plans to cut 2,400 jobs including 1,800 store positions and 600 ‘Geek Squad’ staff. Dixons and Best Buy are following the trend of retailers adjusting their business models to service shoppers now preferring to do their purchasing online. Consumers are becoming more price savvy and are happy to carry out competitor price monitoring online to find the best price for a product.
Competitor-based pricing means it is now essential for online retailers to use pricing intelligence to see what their competitors are charging for the products they are selling. This allows etailers to react quickly to price changes on competitors’ websites and set their own prices accordingly
Here are four tips for online retailers to gain competitive advantage with their pricing:
1. Understand your customer’s online habits
Online shoppers are using price comparison websites that have the ability to match products by rival retailers. They can check prices across many webstores in minutes before choosing the product with the best value for their money. If you are not pricing your products competitively, you will not be considered in the consumer’s online decision-making process.
2. Larger retailers will be able to offer perks that smaller retailers cannot
Internet retailing giants such as Amazon can offer free shipping and other perks to shoppers due to the size of their business and special arrangements with third parties. While you might not be able to match Amazon on such deals, you can work towards ensuring that you are offering your customer the best price for the products you are selling online.
3. Know that your competitors are monitoring your prices
Etailers are following their competitors’ prices and changing their own prices quickly when changes are made on other websites. You need to do the same! Trying to manage this manually is inefficient and will take many hours from your other daily tasks. Pricing intelligence tools such as Profitero will provide you with all the essential competitor pricing information daily.
4. React to online pricing changes immediately
Follow what your competitors are doing with pricing on the Internet and react quickly to changes in their prices. The Internet allows you to see competitors’ price changes immediately. If your competitors are changing their prices frequently, you can do the same! You can lower your prices when they lower theirs, you can increase your prices to grow profit margins when there is too much of a gap between your low pricing and their higher prices, and you are also increase your prices when they are out of stock. You’ll quickly learn to price correctly!
With the shift to online retailing, businesses must react quickly to what the competiton is doing with pricing.
Pricing intelligence company Profitero works with retailers and manufacturers to help them increase sales and maximise their profits by using competitor price, promotions and stock information at scale. For more information on Profitero price intelligence and competitor monitoring, visit www.profitero.com or email firstname.lastname@example.org.