E-commerce is the fastest-growing industry we’ve ever encountered. According to the latest research, in 2023, e-commerce sales are expected to surpass one-fifth of global retail. It’s more than certain that these numbers will go up significantly in the nearest future.
The market is growing and so does competition among retailers. Therefore, more and more retailers seek effective solutions that will allow them to develop their businesses and beat the competition. Yet, the answer is already here – competitor price monitoring.
In this article, we’ll explain the 5 main benefits of implementing price monitoring in e-commerce to convince you that implementing price tracking software is one of the best decisions to make in 2023.
Prices reduction to get a leading position
It’s not a secret that consumers are seeking the lowest prices most of the time. There are two reasons behind that. First of all, buyers like to be economical and are not very fond of overpaying for goods when they can have them cheaper. Secondly, it is extremely easy for consumers to check the lowest price by using various price monitoring websites, such as Idealo.
Therefore, retailers must make sure their key products are well visible on price comparison websites and marketplaces. It isn’t possible without monitoring the market and competitors’ moves since more and more of them decide to use Price Intelligence software and can change their offers even a few times per day.
What’s more, nowadays retailers should be aware that even a few cents of difference can make a deal. That is why it’s so important to keep on track with market changes which – when it comes to e-commerce – may occur rapidly.
Let’s take a look at the example below to see how it works in practice.
At the very beginning, BUYTV.COM’s offer was in fifth place. However, just a small price change (2,01 EUR) gave the shop the leader position. Concerning a product that costs around 500 EUR, that’s only a 0.4% difference!
That’s how you win the market!
Nevertheless, spotting such opportunities without any software support is barely possible due to the current e-commerce market dynamic and the growing number of competitors. And that’s the advantage the price monitoring app gives you.
Margin optimization for higher profits
However, lowering the prices is not always the case. Though the competition in the e-commerce market is fierce, there are various situations where retailers can increase their margins without losing the leading position, e.g. during stock shortages.
Numerous price monitoring software provide vital reports along with Dynamic Pricing services that allow merchants to adjust prices to the current market situation, and manage them according to prior rules. As a result, retailers gain accurate pricing, more time (as there is no need for manual implementation), and – last but not least – higher profits.
Tracking historical data to understand the market changes
E-commerce is characterised by rapid and diverse price fluctuations. The prices can change even a few times a day, and the same product may cost much more just a few days later. Thus, when it comes to price monitoring it’s essential not only to monitor up-to-date prices but also to be able to analyse and follow historical price changes.
By tracking historical data retailers may know better their competitors’ strategies, as well as understand customers’ behaviour. In practice, it allows merchants to recognize:
- when products’ prices are the highest,
- whether a specific product is really getting cheaper during the special offer period,
- what was the lowest and the highest price of a particular item in a given period of time?
That’s why the ability to check a product’s price history is often one of the key functionalities of price monitoring tools.
Tracking historical data is also crucial when talking about promotion seasons like Black Friday & Cyber Monday.
Hence, monitoring historical prices, supported by a price monitoring tool, allows retailers to have a deeper understanding of their market and to make data-driven decisions in the future.
Taking advantage of promotions
Sales promotions can be very effective when it comes to increasing profit and customer engagement in an online store. Nevertheless, easier said than done – launching a successful promotion requires proper preparation and strategy first.
That’s another situation when price monitoring comes in handy. Thanks to price tracking retailers are able to:
- Find out what their competitors do promotion-wise.
- Choose the right product for the campaign.
- Implement an effective pricing strategy and set pricing rules.
- Monitor numerous promotions on every distribution channel to verify whether their endeavors yield results.
Launch new products & enter new markets
Launching new products as well as entering new markets are proven methods to increase profit and extend customer base. However, it’s indispensable to start the expansion with in-depth research. For instance, when establishing sales abroad, retailers should be aware of how many companies sell products that they offer, and what are the prices. With price monitoring tool merchants can discover their future competition and see how competitive their offer is. After all, being successful in one country doesn’t automatically mean history will repeat itself in another one.
Conclusion
Price monitoring enables e-commerce retailers to yield multiple benefits. The mentioned Big Five is just a foretaste of what you can actually gain when implementing price tracking software into your business.
As the e-commerce industry is rapidly expanding, the online sales landscape is becoming more and more competitive. Therefore, there is also an urgent need for advanced solutions that will help retailers stand out from the competition, and win the market. Owning to the constant technology development, price tracking, and automation is the future of e-commerce, so let the future of your company begin today.
Meet with the authors during the E-commerce Berlin Expo 2023:
