Over recent years, pricing intelligence has had a lot of airtime in the digital eCommerce space, and for good reason. Retailers, big and small, are harnessing Artificial Intelligence in order to stay competitive, leaving businesses that aren’t to fall at the wayside.
For any business to achieve long-term growth and boost sales, it must understand the market and adapt its strategy accordingly – especially its pricing strategy. This is where AI-powered pricing intelligence comes in.
To find out what pricing intelligence is and why it’s so important for all eCommerce retailers to increase their conversions and revenue, keep reading.
What is pricing intelligence and how does it work?
In this digital age, online consumers have a world of options at their fingerprints. Even when a consumer is exploring your site and your products on offer, they are always a mere few clicks away from your competitors’ site, which means that they can be easily swayed, especially when your competitor has better offers. Put simply, if a consumer is looking for a particular product and they can buy it cheaper from your competitor than they can from you, chances are that they will.
However, it’s not as simple as you altering the price of a pair of white trainers because your direct competitor has lowered the price of their white trainers. Nowadays, online retailers have catalogues of thousands of products and the prices of products may change more than once a day, which makes monitoring the retail space near impossible. This is where pricing intelligence comes in.
Pricing intelligence is the revolutionary solution to monitor, analyse and track price changes across a market so that you know exactly how your competitors are pricing their products and so you can stay on-top of any pricing trends. Pricing intelligence is powered by Artificial Intelligence (AI), meaning that it can aggregate big data and track immense volumes of price changes across hundreds of sites at great speed to provide “real-time” insights – a task that would not be possible if attempted manually.
These advanced pricing intelligence technologies work 24/7 to provide accessible clear data and insights that are up-to-date, meaning that a brand can always stay abreast of price fluctuations and has all the insight needed to optimise its product catalogue accordingly.
Without price intel, retailers simply cannot monitor the constantly-changing eCommerce market (price increases, decreases and deals/offers), and without this knowledge they cannot implement an effective and competitive pricing strategy/
Why is pricing intelligence so important?
Pricing intelligence is important because the price is important to retailers. In fact, the price is perhaps the biggest determining factor in whether or not consumers invest in your product instead of shopping with your competitor. However, there is a fine line between pricing your product too high or too low. You may be tempted to price your products highly in an attempt to increase profit margins, but you risk losing competition and see a decrease in conversions. However, if you price your products too low you risk brand degradation and compromising your integrity.
Importantly, though, beating a price isn’t as important as matching it – especially if your brand is established and you have built a community of loyal customers, you may find you don’t need to beat your competitors’ prices. Price matching will work in your favour if you can offer other benefits that your competitors can’t (e.g. cheaper shipping costs, faster delivery or better buying experience/incentives).
How to use pricing intelligence to create a pricing strategy
With the insights from pricing intelligence tools you can create an effective pricing strategy that works for your brand. To create a pricing strategy you should first identify your direct competitors and by using retail pricing intelligence tools you should analyse their product catalogue and how they are pricing differently to you.
Before making drastic price changes, consider the below questions:
- Is your brand established or emerging?
- Who are your direct competitors?
- How much are your products worth?
- How low are you willing to price your products?
- Which of your competitors are you willing to price match?
- Are your competitors utilising offers and promotions – how can you do this too?
You should also look at older data to uncover any trends that could affect pricing, such as seasonal promotional offers. Be sure to monitor the findings over a long period of time to effectively pinpoint recurring consumer behaviours and patterns before actioning changes.
Retail intelligence: the solution your brand needs
The key to eCommerce success is having all the intelligence you can about the market, especially the pricing status of your direct competitors. Your brand simply cannot compete in today’s online marketplace if your prices aren’t competitive.
By leveraging advanced AI-powered technologies like pricing intelligence tools your brand can keep abreast of all market fluctuations and make informed decisions on pricing to great effect. The benefits of this are an increase in sales, better customer satisfaction and improved brand awareness.
What’s more, harnessing tools like this are a positive investment in terms of increasing workplace productivity and freeing up business resources. To stay competitive, relevant and contemporary in today’s eCommerce world, advanced technologies are essential.
