E-commerce stores work under an intense rivalry partially caused by the large reception online sales had among consumers, which made an upward increase in this type of digital companies. Standing out among the big number of digital stores is not easy; however, if you make proper competitor analysis and employ adequate pricing strategies, you can differentiate from your competition and improve your online performance.
Thus, you can beat your rivalry, but only if you have the necessary tools and methodologies to do this. Let us take a look at some of them:
Monitoring competition’s performance
If competition is part of your market, then this very same market is a factor you cannot miss at all. Watching it must be something usual for you, and as time goes by, you will see that the data you collect is beneficial to improve some aspects of your e-commerce store.
Being conscious of who your direct competition is (that means those who sell the same products as you do to a similar audience and for very similar prices), will be a crucial factor to differentiate yourself from them. To do so, you need to keep track of competitor’s prices and changes in their platform, looking for both qualitative and price differences.
Compare their platform with yours and extract relevant data. In a “store level”, what product information do they provide that you do not? How much do they invest in digital ads? Do they have better shipping costs and service than you? Is your platform understandable and intuitive? Make yourself this sort of questions to stand out and beat your competitors.
In a “pricing level”, competition tracking tools are efficient ways to understand your market better and detect price patterns and tendencies. That, as well as providing you with a competitive advantage, will give you the chance to analyze properly your vertical and adjust more competitive prices.
Improve your positioning
Having under control the three primary metrics of your e-commerce will help you better manage your market strategies and optimize sales. Competitor tracking tools can help you understand these three metrics, which are price index, profit margin and conversion rate.
Price Index is your competitiveness indicator inside your vertical. The key is that your price index has to be higher or equal than the reference figure. If it is like this, it means your competitiveness level is right concerning your rivals. However, if it is lower, you will have to vary one of the other two metrics.
Profit margin refers to the difference between your acquisitions costs to your supplier and your final sale price to the consumer. It is indispensable to protect this margin in order to keep with a profitable e-commerce store.
Conversion rate indicates the number of total sales that customers made through your store. A good conversion rate is positive as long as you do not put into risk your profit margin.
Controlling and playing with these three metrics will help you boost your competitiveness level, improve the traffic volume of your store and better comprehend how to define a market strategy to beat your competition.
Readjust your pricing
When it comes to beat the competition, there is another way besides watching competitors’ prices and studying their market strategies to increase your positioning: repricing tools. These solutions suggest new values for your products basing their decisions on your competitors’ prices and several rules you have previously set. Save a minimum profit margin for each product; decide to be cheaper or equal than a competitor for a specific brand or category, etc.
All these methodologies and tools will allow you to stand out from the competition and improve your online competitiveness.