Setting up your online e-commerce store and nurturing it to success are completely two different things. While you must have done a lot to establish your store on a digital platform and launch your business, if it doesn’t grow, everything else makes no sense.
That is to say, you must not only focus on the creation but also work upon strategies that affect the life of your business. If you happen to ask an expert about it, he/she would go on telling you about every single factor that affects the growth of a business in one way or the other. But we aren’t doing that thing here. Of all the factors, one thing that stands out from the rest is the product price.
If a customer isn’t convinced with the price or say he/she finds it overpriced, you will never get the opportunity to make a sale and prove that your product is worth the purchase. On the other hand, if you have set a price that is way too less, you will eventually have to shut your business (low funds). Either be the case, pricing your product is extremely important. Hence, the need for something that we call Price Intelligence or Price Monitoring.
Before we get into the details, let’s run down a few facts that place price as an important thing in terms of e-commerce success.
Facts and figures to keep a note of:
94% of the buyers compare product prices before making a purchase. (1)
60% of the customers consider pricing as the first criteria that affect their buying decision. (2)
54% of the shoppers stated that they would purchase products left in the cart if offered at a lesser price. (3)
It is clear that the price of a product is important and has a huge impact on the sales and in a way the store’s success.
What is Price Intelligence?
To define, Price Intelligence is the ability to keep track of the product prices, compare and analyze them to make better and smarter decisions. For example, let’s say a product has a price of $25 in your store. Now the same product is available in one or more stores at a price lesser than $25.
Probably this is the reason why not even a single quantity of the product was ever sold. If you knew that there are stores selling the product at lesser rates, you would have kept your product at a similar price. This is where the idea of price intelligence comes into play.
With Price Intelligence, you have leverage as you can learn about the market rates and price your products wisely. While you can do the same manually, there are automated tools that can also be used to track and analyze product prices.
Is it really important?
So far, we have learned about what price intelligence followed by the statistics suggesting that price is an important factor when it comes to making a purchase. But do you think spending all the time to track the prices, assess, and analyze them is worth it?
Let’s find it out.
To begin with, we live in a fast-paced world and everything changes within a blink of an eye. Competition is fierce and rises at a pace faster than ever. Where a rightly priced product can enhance your sales, one with a wrong price would doom everything to failure. Pricing intelligence helps you learn about the market prices and update your storefront to remain competitive. Not to forget that prices fluctuate rapidly and with pricing intelligence you can know about all, keeping up with the market conditions.
With customers having the tendency to compare prices before making a purchase, pricing intelligence will help you stay updated and fine-tune your store prices winning customer’s trust and boost sales.
When is Price Intelligence Most Suitable?
One question that arises here is whether every e-commerce store owner must opt for price intelligence. While it does no harm in pricing your product as per the market requirements, not every product requires such an assessment. For example, if your store offers something that is not common and not easily available, keeping the rates high only increases your profit share. Similarly, if you have products that are no longer in trend, stashing the price only acts as a bonus.
So who is this for?
- Online and offline retailers
Definitely, price intelligence is one thing that is applicable both for the online and the offline store owners.
- Inventory about 297 SKUs
For retailers that have an inventory at and above 297 SKUS, price intelligence is a must.
- Non-unique brand items
When you are selling products that are pretty much common and not something unique, it is important that you have done your homework, found what the market offers, and then proceed to tag your store items.
- Competitive items
For products that are placed in the competitive segment, you are bound to put price intelligence to use.
Advantages of Price Intelligence
- Keep your prices competitive
Needless to state, the most important benefit of using price intelligence is that it helps you price your product based on the worth and the actual market conditions.
- Higher Sales
When your store offers products at an affordable rate or one that is the same/better as compared to the competitors, the total amount of sales dramatically increases.
- Effective stock management
Act and react as per the market conditions. Price intelligence is not just about pricing the products but it gives you an upside-down view of the product, its life, and history. Knowing that same, you can regulate the stock to be able to serve the industry at its best.
- Proactive in approaching customers
When you are well aware of the market conditions and have priced your products at competitive prices, you can better approach the customers, empower them with offers and discounts, enhancing the likelihood of winning their trust and confidence.
Few things to look out for when conducting a price intelligence study
- Data Precision
Price intelligence, though important, can also be misleading. Meaning that if the prices listed or portrayed aren’t appropriate, it would lead to ineffective changes in the price of the product on your storefront. This dramatically affects sales, turning tables upside-down. Hence, make sure that the figures are precise and the data has worldwide coverage. Do not fall for data this is focused on a smaller sample.
- Product availability & shipping fee
True that you must set the prices as per the market but there are exceptions to the same. For products that are not in sufficient quantity, keeping the price high will not harm. Similarly, when you are shipping to locations that have a higher fee, it is acceptable if the rates are high.
- Similar products
Price intelligence isn’t only for a product but for similar ones also. It is important that you have several products belonging to the same category, priced within the same range. Often, it so happens that while browsing for a product, customers end up looking for products that are similar to the original product. Having them within the same range will increase sales and boost profits.
In addition to the above, see how the products have been segmented, the data scan frequency, etc.
i-PCAE: How does this works?
i-PCAE is a price intelligence tool that will helps e-commerce players in strategizing the pricing strategy of their marketplace or their products so that their product pricing fits into the market segment pricing. These tools will analyze historical prices and provides the user with various insights on how they could strategize their product pricing in the future.
Step One: Load the front page
The first thing you need to do is fill up the front page. Click on the PCAE website. The page will have three different fields.
Step Two: Fill in the details
Fill in the token, followed by the keyword you wish to run the search operation. Next, enter the price of the product, and finally, select the e-commerce platform that you wish to search on.
Step Three: Verification
Here all you need to do is click on submit. This will initiate the verification process.
Step Four: Notify User
As you have initiated the verification process, the system will search for the token and the keyword. If not found, the system will notify the user about the same and ask them to try again.
Step Five: Generate Report
In case the keyword and the token as entered by the user has been found in the system, the system will send a prompt asking the user to wait until the report has been generated.
Once the report has been generated, you can download the same and then assess it to come up with insights. This way you can learn about the price history, price position, price comparison, and category analysis.
Based on the above, go ahead to customize the same as per your understanding.
Price intelligence is an important concept and helps you get the details of a product followed by the price over the course of time. Having all of the information, you are in a better position to price your products and increase sales of the same.
- Intelligent Code (2020, November), Competitor Price Monitoring Software for eCommerce Profitability. Retrieved from https://www.intelligencenode.com/blog/how-price-monitoring-software-helps-retailers-maximize-profit/
- Kocak Yigit, (2017, December), Pricing Facts: Data From Consumers [Infographic Included]. Retrieved from https://prisync.com/blog/striking-pricing-facts-for-retailers/
- Basak Saricayir, (2020, February), Price Intelligence: Store’s Need to Have this Function. Retrieved from https://prisync.com/blog/every-company-needs-a-price-intelligence-function/
- Catherine, (2020, July), Pricing intelligence: what is it and why does it matter?. Retrieved from https://www.competitormonitor.com/blog/pricing-intelligence-what-is-it-and-why-does-it-matter/
- Springbord, (2018, September), Top Five Reasons Pricing Intelligence is Important to Retailers. Retrieved from https://www.springbord.com/blog/top-five-reasons-pricing-intelligence-is-important-to-retailers/