It is crucial to have a well-defined pricing strategy for the products of your e-commerce. That will help you increase the volume of traffic and, as a consequence, the number of conversions. Price Intelligence solutions allow you to set prices that adapt both to the market as well as to your own needs.
An e-commerce store adapted to the market
Designing a pricing strategy is not an easy task. It takes dedication and a previous in-depth market investigation. Nonetheless, once you have fixed the prices for your online store, you still have to pay attention and react to possible changes in the values of several products.
An efficient and simple solution is to use price monitoring tools that include price intelligence features, this way, you will have the market under control, and you will be able to react on time to its changes. That is one of the factors that determine your level of competitiveness online.
On the one hand, being able to adapt to the market means to observe competitions’ moves; and on the other hand, to study the state of your e-commerce store inside the same market.
Metrics: indicators of your digital store’s status
How can you determine what the status of your online store inside your vertical is? Three simple metrics will be helpful when evaluating your performance online:
Margin: It comprehends the profit you obtain for each product’s sale. It is the difference between the acquisition cost and the final sale price. Stores try to maintain as wide as possible this metric to get the highest possible benefit.
Price Index: It indicates the level of competitiveness of your store inside your vertical. If its value is inferior to the reference figure, you may need to modify your margin and set more economical prices to better adapt to the market situation.
Conversion rate: It shows the final sales. You may have a good conversion rate as long as you do not give up your profit.
To control these metrics will be useful to boost the performance of your e-commerce, improve your positioning, optimize your prices to adapt to the market and bring more potential customers.
Competition determines the market’s status
Competitors are an essential factor to fix your own products’ prices. The values your competitors set will directly influence your pricing strategy and primary in buyers decision, which is based mostly on the price of a product. Thus, the one who has the best price will get to increase its sales.
However, as the market changes so quickly, it becomes difficult and expensive to maintain updated your products’ value continually; that is why monitoring tools are efficient solutions to make a price analysis and optimize the state of your products.
Your e-commerce, your rules
Price Intelligence tools, in addition, take into consideration the several conditions you should have previously established.
But what does it mean? Each store has its own pricing strategy. That is why each one wants to put conditions that differ to their competitors. Price Intelligence solutions determine its price suggestions intelligently, basing those primarily on the parameters you consider indispensable.
You can define your conditions by categories or brands, and thus, segment your catalo and optimize your prices in a more detailed and precise way. Do you want to be 2% cheaper than your most direct competitor? Do you want to equal prices of a category to the average market’s price? Do you want to keep a minimum profit margin for all your products?
All these options will increase your profitability and maximize your sales opportunities.