What is Competitive Pricing Analysis?

Find out more about pricing analysis tools and their application in the world of online retail.

- 3 Minutes read

If you have an e-commerce business you’ve probably heard of this type of analysis, but what is it exactly? Competitive pricing analysis refers to the complete and detailed study of competitors’ prices in a particular retail industry. This happens in multiple retail sectors ranging from Pet Care, sports, dermocosmetics, musical instruments, toys, home care, technology, appliances, to fashion accessories, among many others.

At this point, we might ask ourselves whether this type of competitive study is more necessary in certain sectors than in others, and the truth is that it becomes essential in any of them.

It is rare for a specific e-commerce business to be in a sector with few rivals, either because it sells a very specific product for which there is no direct competition or because it is in an emerging niche. In such a case, price analysis may not be so relevant, given that such e-commerce business will have more freedom when setting prices, as it has an actual advantage of exclusivity. However, as we said, this rarely happens and the majority of online stores find themselves in very competitive scenarios.

It is precisely in this latter scenario that an exhaustive market analysis becomes more relevant. It is very frequent that several, not to say many, online stores share a large part of the products in their catalog and that all of them compete to improve and increase their market share. The problem is that achieving differentiation is very difficult when competing with products that have exactly the same characteristics in one store as in another. These are identical products, so what will be one of the main factors that will help you gain more market share? To this we can answer that, without a doubt, price will be a decisive factor in the decision making of the final buyer. This is why it is so important to carry out a detailed and up-to-date pricing analysis on a daily basis.

What can you achieve with competitive pricing analysis?


A thorough analysis can bring great advantages for your e-commerce, not only to gain in competitiveness, but also to detect opportunities to improve your sales. Let’s explain this in more detail:

  • Improve competitiveness: through daily monitoring and follow-up of your competitors you get a real vision of the market that allows you to make decisions regarding your pricing policy that are more justified.

  • Avoid losing profits: It may be the case that in top-selling products the profit margin is much tighter, due to the high level of competitiveness for such products. However, you should never allow yourself to come to the loss and compromise the profits of your online store. Through a correct analysis of the competition, you can come to detect what position your business is in relation to your competitors and decide whether it is worth reducing margins further to gain more market share.

  • Find growth opportunities: this type of monitoring of your sector can help you detect common or frequent practices and strategies among your rivals or even see if you already have some advantage over them in certain products in your catalog.

Just as you can improve your competitiveness, you can learn to detect new business opportunities. You only need the right pricing analysis tools to be able to study your competitors without compromising your company’s resources and time.