A recent study from eMarketer reveals that online retailers looking to gain margin advantage are increasingly using dynamic pricing, the practice of changing prices based on market conditions, consumer behaviour and competitive intelligence. The ability to react in real-time presents significant opportunities for retailers, who are benefiting from pricing intelligence tools such as Profitero to monitor and respond to changes in competitor prices as they happen.
In the report, “Dynamic Pricing: What Retailers Need To Know About Competing In Real Time”, eMarketer states that as dynamic pricing technology has become more widely accessible, more and more retailers are adopting it in order to compete with the dominant pureplay retailer, to undercut competitors, as well as to attract the increasingly price-sensitive shopper.
Being able to track competitor prices in real-time delivers immense opportunities for retailers, with 23% of global retailers polled by Retail Systems Research citing gaining margin advantage as the key driver for their adoption of dynamic pricing.
Whilst most retailers don’t have the resources of big players such as Amazon or Staples, tailoring pricing strategy to increase online competitiveness is possible for any retailer, both large and small. Follow these tips from Profitero to ensure you have an effective pricing strategy in place:
- Adjust your prices to match the competition: If your competitors lower their price, look to do the same. Price matching will ensure you remain competitive to the increasingly price savvy shopper;
- Adjust your prices at a specific time of day: Optimise your prices when your shoppers are most willing to purchase;
- Adjust price according to web traffic: Measuring traffic for your products will determine how they should be priced. When demand is low, prices can be dropped, and when demand is high, prices can be raised;
- Adjust price based on conversion rates: If a product receives lots of traffic but low sales, the price is usually too high. Keep track of conversion rates to determine the optimum pricing strategy for your products
By analysing and responding to competitor pricing data on an ongoing basis, retailers can optimise sales and drive greater margins. Just as consumers use price comparison websites to provide transparency into prices and products, retailers can benefit from price intelligence tools such as Profitero to get near real-time intelligence into the prices, product assortment and stock availability information of their competitors. This critical insight allows retailers to make informed, timely and valuable pricing decisions.
To find out how Profitero is working with leading retailers such as Tesco, Waitrose, Ocado and Walmart-owned Sam’s Club to achieve smarter pricing and grow sales, contact us at sales@profitero.com.
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About Profitero
Pricing intelligence company Profitero provides retailers with actionable price intelligence data, monitoring over 50 million products across 4,000 eCommerce retailers every day, observing pricing, promotions and stock availability. We work with the world’s leading retailers, enabling them to acquire new customers and grow profit margins by monitoring and responding to changes in competitor pricing and promotional activity as they happen. For more information on Profitero price intelligence and competitor monitoring, visit www.profitero.com or email sales@profitero.com