eCommerce has taken pricing to the next level, and retailers need to take a few actions to make sure that they don’t get left behind. Store clerks no longer have to go through all the items in their inventory and put new stickers on them. Re-pricing is much faster than that online, and this article will teach retailers what they need to know in order to keep up.
There are three main pricing challenges that retailers need to get up to speed on. 2015 should be the year when all retailers understand how to optimize their pricing, instead of just watching big box retailers have all the fun (and profits).
Say you’re on a backpacking trip. There’s no way to know how to get to your destination, unless you first know where you are. However, many retailers don’t know where they stand in the market. You can’t blame them, though, since it’s such a vast industry with countless competitors.
The first step to creating an effective pricing strategy that can keep up in the digital age is creating a “you are here” marker. That way, retailers can know which competitors are closest to them in price and how they can improve their positioning.
Building that awareness is a lot easier said than done since retailers only have so many sets of eyes. Competitor pricing changes so quickly that data from one moment could be very different shortly after. That’s why many choose to employ competitive monitoring solutions to help them keep up with the market through every twist and turn. These eCommerce solutions make it possible to have accurate competitive data in real time.
The first step to responding to a competitor’s price change, is knowing that it happened in the first place and the second step is…
Managing pricing across all channels
So many channels, so little time. The sheer number of places that retailers can sell their products these days may be daunting, but it’s definitely beneficial as well. The reality is that shoppers have become multi-channel consumers - they want to shop on your web store, on Amazon, in-store, on their mobile devices, and maybe even on their smart watches. So that leaves you with the task of creating a great experience on each and every one of those channels, unless you want to risk missing out on those precious sales.
Not only do you have to make sure that your inventory is accurate across channels to prevent out of stock situations, but you also have to make sure that your pricing is uniform. Shoppers will quickly lose trust in you if they see a lower price for a product on Amazon than the one they purchased from your webstore. It’s hard to keep a balance, especially since the Amazon marketplace is hyper competitive. Don’t give shoppers a reason to leave you bad reviews, provide the same price across all of your channels (unless you are able to provide unique value on a certain channel that validates a higher price.)
But what price is the right price? There’s no real answer to this question, since it’s constantly changing. That’s where automated pricing comes in to save the day.
Not being able to keep up with the market
Even if a retailer knows what’s going on in their industry, if they aren’t able to act on it, then there’s no point in monitoring competitors. As a retailer and also a consumer, you know that price matters. There are many Comparison Shopping Engines that shoppers use (like Google Shopping) and price is one of the main factors that impacts where they decide to checkout.
Having an outdated price is a big faux-pas in online retail. Yesterday’s, or even this morning’s prices can cost retailers significant sales. Big box retailers know this, and they have re-pricing down to a science. If it’s winter, Amazon will certainly have higher prices on snow gear. If it’s fall, Wal-Mart will definitely discount swimwear. A flexible pricing strategy simply makes sense.
These retailers’ if-this-then-that pricing model is called dynamic pricing. Using cloud software, in-house, or even manual methods, it allows retailers to update their pricing based on all the factors that matter most to their bottom line. For example, seasonality, time of day, and conversion rates are major factors that can affect your pricing. All of these and more can be taken into account in order to craft a unique pricing strategy, because no two retailers have the same pain points or pricing needs.
Automating the pricing process takes the guesswork out of eCommerce. With a dynamic pricing strategy, retailers are able to benchmark, manage their pricing on multiple channels, and update pricing when it matters most. With pricing taken care of, retailers can devote more time to keeping their customers coming back again and again.
About the author
Angelica Valentine is the Content Marketing Manager at Wiser, the leading pricing intelligence suite. Wiser’s flagship product, WisePricer is a full-featured pricing and merchandising engine that monitors, analyzes and re-prices retail products in real-time. WisePricer enables retailers to grow profit margins, price with confidence and improve merchandising through powering the development of a sound pricing strategy.