There are different factors you need to consider when defining the prices for your e-commerce store. However, one of them is vital to keep in mind: competition. Thus, making a proper product market research turns out to be indispensable to choose the best prices for your vertical.
Actually, most of the internet users make “quick product market research” every time they buy over the internet. What do they look for? They simply look for the best price. Users tend to choose where to buy depending mostly on the price of a product, although they often consider other factors, such as shipping cost and time, or the existence of offers and promotions. Nonetheless, these other factors are found in a lower grade.
Then, if even the consumers make something similar to product research; e-commerce stores definitely need to have controlled the prices of its rivals in order to modify its prices, improve its competitiveness and obtain more conversions. That is a process that takes a significant amount of time, given the vast amount of data there is to analyze.
That is why using automated tools will clearly optimize your work; and thus, you will be able to save time and money. Price monitoring solutions turn out to be highly recommendable assets for digital business, as they enable you to track competitors’ prices and, at the same time, give you a more broaden yet detailed insight into the market.
Through price monitoring, you will continuously keep updating your database according to the real market situation. This is important because prices change quickly in many verticals, so keeping up with those changes is essential to stay competitive among your rivals.
Besides, by making competitor research, you can understand much more easily how your market behaves. You can identify what pricing strategies they are applying, or you can detect if there is any repeated behaviour in the prices of certain products in the long term. With all this information, you can make better decisions that positively improve the competitiveness of your store.
In many occasions, it happens that a store lowers the price of a product and right after all the competitors lower their prices as well so that they can keep up at the same competitiveness level. Nevertheless, you still need to know how to identify whether this may be a good move for you, or how much is it worth to lower your prices without risking your profit margin.
Right here is where another tool comes into play: price optimization software is a valuable asset that helps you choose the best price for your products.
These tools track the prices of your competitors and suggest you competitive prices according to the real market situation, based on the data from the product market research. That is an interesting feature because, usually, these software solutions have the possibility to add conditions and parameters to regulate its suggestions. Thus, if you want your products to stay cheaper than a particular competitor, the software will take into consideration and will suggest prices according to it.
And what’s more, it will boost your positioning in marketplaces like Google Shopping or Amazon. Adequate positioning in these digital markets is helpful, as the better positioned, the better consumers perceive you. This can lead to more traffic and, consequently, an increase in the number of conversions.
Thus, given the significant number of existing rivals on the internet, it becomes indispensable to use automated tools that help stores to make an exhaustive competitor research, and stand out from their rivalry suggesting prices according to their needs and market’s status.