If you own an e-commerce store and you are thinking of making comparative market analysis, it means that, given the current situation of electronic commerce, you have already noticed the trending urgency that is using price comparison sites.
In the past years, the number of buyers on the internet has notably increased. According to Eurostat, 7 out of 10 internet users in Europe bought over the internet in 2018; that would be almost 70% of European internet-using population. There are differences depending on age and country, but in general terms, this is a generalized upward tendency.
Since the volume of online customers has increased, the number of e-commerce stores has also increased accordingly in order to supply their buyer’s needs. However, selling on digital platforms is an entirely different story compared to selling in brick-and-mortar stores. In digital stores, the range of audience can broaden a lot and can cover a significant much wider segmentation of the population.
That would be okay if there were only two or three e-commerce stores, but the reality is there is an umpteen number of them. This means internet users have many websites to compare and buy online, and competitiveness among online businesses appears to be quite high. That is why comparative market analysis becomes so important.
The need for comparing prices online comes from the will of gaining advantage concerning competitors and maximizing results improving competitiveness and outcomes like higher conversion rates.
7 out of 10 internet users bought over the internet in 2018 in Europe.
Price comparison to stand out from competition
Unless it is a very particular product from a well-known brand, most online customers use to base their purchasing decisions focusing mainly on the product’s price. That means that offering truly competitive prices on the internet is the key to a profitable business.
Generally, users tend to look for new launchings, offers, discounts, gifts… an appealing price number that catches their eye. Several factors can also influence buyers’ decision about where to buy; such as customer service, user experience, shipping cost (and shipping time), etc. These are a few of the many qualitative factors that you may need to take into account when selling online as well.
Nonetheless, the price of a product is the main factor when deciding where to buy online. That is why shopping comparison sites are so useful for digital stores. Since there are so many competitors, e-commerce stores need to have powerful tools to track competitors’ prices and allow them to offer more competitive prices.
Shopping comparison sites track prices automatically so that you can observe your rivals’ price changes in a visual and comprehensive way. Thus, you can detect what is the strategy your competitors are employing, which can be beneficial for you to define better a pricing strategy that matches the current real needs of the market.
Price comparison sites can improve your positioning
By effectively analyzing your data, you will be able to verify whether applying changes on your prices is actually profitable or not. Competitors may lower their prices, but is this the best movement you ought to make? How much can you lower prices without putting your profit margins at risk? By using price comparison sites, you can make decisions about equaling prices, lowering them or not taking any action. By using real market data, you can make smarter pricing decisions and protect the interests of your business.
Having a good pricing strategy means optimizing your results and driving higher conversion rate, obtaining a better price index and still keeping up your profit margin or even expanding it. These are the three primary metrics any e-commerce store should undoubtedly take into consideration when analyzing the data provided by online monitoring tools.
By making a comparative market analysis, you will be able to see not only the positioning of your e-commerce store, but also of your rivals’. By making better decisions, your positioning will be optimized and you will be perceived by users as a strong player with competitive prices.