Do you know which data is actually useful for you to offer more competitive prices in your digital store? Competitor analysis tools give you reliable data that will help you improve your e-commerce store pricing strategy and increase your conversion rate.
The more accurate the data, the better
Given the current harsh competitiveness among digital stores, it is essential to understand how to analyze and use reliable information in order to improve your online performance. It is commonly known that rivalry among retailers has increased exponentially during the last few years and that almost every business uses digital platforms to sell their products online.
Thanks to competitor analysis software, you can have a wide and much better understanding of the current market situation. But which data can help you understand the state of the market and your position in it?
There are some key indicators that you cannot omit at all: Price Index, margins and conversion rates. Besides, it is also useful to know what is your positioning concerning your direct competitors. Your positioning helps you know whether your products are competitive or not and also provides you with key information about your rivals’ strategy.
Optimal usage of platforms like Google Shopping is helpful to obtain more traffic and increase your conversion rate. If you know which of your products should be included in these platforms, your chances to improve your positioning will increase for sure.
Execute a competitive analysis research to better define your pricing strategy
So, we say competitor analysis tools for marketing can help you obtain better positioning in platforms like Google Shopping, and that is true, but it is not only about that. Thanks to the data provided by the competitive analysis software, you can also improve your main e-commerce KPIs: Price Index (PI), profit margin and conversions.
When you have a good understanding of these indicators, you can analyze and use relevant information for being able to react and modify your pricing strategy online.
That means if your Price Index is equal or higher than the reference figure, your level of competitiveness concerning your competitors is good. Regarding the profit margin, it is good to know the pricing trends in order to anticipate to your competitors and be capable to optimize your store performance in terms of sales. Besides, don’t forget to keep track of your store’s conversion rate.
Nonetheless, do not base your decisions only on a single metric. You may need to consider them all to get good results. If you get a good Price Index, try if there is a possibility to increase your margins to get a higher profit out of conversions in your store. This will definitely help you maximize the results of your pricing strategy.
Pay close attention to your target customers and direct competitors
When selling online, it is very important to keep in mind who is your target audience. You need to know what are their purchasing habits, what kind of product do they look for (something very specific or general), and adjust your pricing strategy in relation to this audience.
Other than the audience, the products: Do you know what products are your top-sellers? Do you know what the most visited products by your audience are? Competitor analysis tools provide this sort of information and help you visualize your rivals’ pricing strategy and anticipate future pricing trends and changes.
However, even though understanding your audience is important, we keep insisting you on keeping track of your direct competitors’ strategy with a business competitor analysis. Monitoring your competitors’ pricing movements will help you improve your online performance and set more competitive prices.
To sum up, competitor analysis tools can help you understand your performance online and your audience. Besides, considering key indicators such as Price Index, margins and conversion rates will help you adjust to a more competitive pricing strategy. In addition, detecting sales trends and opportunities will improve your positioning in platforms like Google Shopping.