Price Intelligence solutions will help you understand the behaviour of your market thanks to competitor’s monitoring and products’ repricing by using optimization tools.
In the first place, what is price intelligence? It can be defined as an analysis methodology that studies the impact of the market’s behaviour on final consumers’ purchasing decisions and, as a consequence, the effect it has over the performance of e-commerce business.
Your positioning in the market matters
First of all, if you want to implement this solution for your business, you need to monitor competition; that means, watching the market in order to know what the situation of your direct competitors’ products is and, afterwards, evaluate different aspects of pricing. Who is more expensive than you? Who is cheaper?
It is vital to manage the positioning of your e-commerce store and try to improve it as much as possible by controlling the three primary metrics of e-commerce: price index, profit margin and conversion rate.
The conversion rate is the number of final sales made through your store.
The profit margin indicates the benefit you obtain for each sale. It is the difference between your final sale price and the acquisition cost to your supplier. Our golden rule is: never put at risk your profit margin only to increase conversions. What is the goal of running an e-commerce business if it is not profitable at all?
The price index metric (PI) measures the competitiveness of your online store. As long as it is equal or higher than its reference figure, your store’s level of competitiveness is going to be okay concerning your direct competition. On the contrary, if it is lower than it, you might want to vary the profit margin to offer more competitive prices for your products, for example.
As you can see, these three metrics are correlated, so it is indispensable to focus on the three of them and not uniquely on a single one. One change can modify the value of another metric. So if you get to control the three parameters and play your cards correctly, you will surely improve your online positioning. This will give you more visibility among your potential consumers and, as a result, will indicate that you are a competitive store in relation to your rivals.
Analyze your data correctly
Once you have obtained all the information you need from the market, it is time to analyze the data. To get the most out of all this information, the best you can do is to segment it into brands, categories, tags… whatever works best for you. A proper data organization will allow you to understand it and analyze it visually and simply.
Besides, a proper data analysis, along with repricing tools, will let you optimize your pricing strategy thanks to being able to make better decisions based on the current real situation of the market.
Repricing tools are efficient solutions that help you readjust the prices of your e-commerce according to the real state of the market and a set of rules and parameters established by the same store.
With all this, you can decide your products to be equal or cheaper than a specific competitor, and specify how much cheaper you want to be. By applying these parameters, you can optimize the performance of your products by segmenting them by brands, categories, tags, etc. This way, your final sale prices will be more competitive and will be set according to your own pricing conditions.
Thus, price intelligence will provide you with a global price insight of your market, as well as a precise and visual data analysis. If your goal is to increase conversions and improve the competitiveness of your e-commerce inside your vertical, Price Intelligence tools will be undoubtedly excellent assets for you.