What is Pricing Intelligence?
In the retail industry, pricing is one of the most important factors that decide how much a business can flourish. If the prices of products are too high, customers will land up at your competitor’s doorstep for business. Also, if they are too low, then there is a chance the product will lose its value. Hence, it is crucial to find a middle ground where the product remains in the eyes of the customers. Hence pricing intelligence coupled with a brilliant strategy could help retailers find the perfect balance. So, what is this pricing intelligence? Well, it is the monitoring, tracking, and analyzing of the pricing data to get better insights into the market and enable you to make informed changes in the pricing. This is a crucial factor for retailers because the pricing of products changes frequently, and regular monitoring of the price position and inculcating required changes help them to stay ahead of their competitors. But this does not imply that they lower their prices; with the correct awareness of their competitor’s premium pricing products, retailers can plan better discounts and lucrative offers to attract customers.
Importance of Pricing Intelligence
Pricing intelligence is one of the most efficient strategies to grow a business. It has become essential to get specific information on a wide range of important data. Without pricing intelligence software automation, it would be a tedious task to collect such data. Monitoring your competitor’s product prices and gathering the required data helps you to understand where you and your competitors stand in the market. Understanding the pricing history, price fluctuation, and the behavior of your immediate competitor are the insights you can get in one place with pricing intelligence. The following are the benefits of pricing intelligence:
- Bigs savings on time, money, and resources
- Profitable growth
- Optimization of your product range
- Competitive edge
- Analyzing and optimizing pricing strategies
- Track and take advantage of the marketplace trends
- Manage inventory
- Customer loyalty
- Enhance PPC spend base on your price position and competitor’s stock availability
- Better Google shopping strategy
- Manipulate the data you need to achieve your business goals
- Benefit from optimizing promotional pricing plans
The three crucial steps to Pricing Intelligence
Below are the three crucial steps to pricing intelligence that retailers can follow to prepare themselves for sustainable growth.
1. Utilizing Automation
In this digital era, manually collecting data on price changes is not only time-consuming; but also, often inefficient. With the rapid increase in data today, it is almost impossible to scale existing data manually. With too many SKUs to check, by the time you prepare a manual review, the landscape will change yet again. With the growth of any company, its number of SKUs, competitors, and channels will also grow. Hence, you need automation here instead of slow, time-consuming processes. In today’s time, price monitoring includes using algorithms to figure out products that are the same or similar and with different images and titles. With the help of algorithms, retailers can get better pricing information even if every retailer has a different website design or structure. However, it is vital to note that algorithms would not locate a price if there is any change in the website’s layout or structure. In this case, you would have to build the function again. Here is where the interconnectedness of man and technology comes in. It will benefit the retailers to get partners that offer cutting-edge technical capabilities with meticulous customer support. By utilizing automation for pricing analysis, you receive precise pricing data judiciously.
2. Creating an effective strategy
The second step to pricing intelligence is creating an effective strategy. You can do this by first recognizing your direct competitors both in the same category and with similar products. Many brands in the market are not even fully aware of their rivals, let alone their products or prices to compare. Once you establish this, watch their past pricing trends. With time, you will be able to identify price trends and repeated behaviors of competitors. Pricing intelligence would help to understand how often they have sales and promotions, what happens to the prices around the holiday seasons, or when they have promotions like back-to-school. You can get an insider’s perspective on the lessons of pricing behaviors by studying historical data. Monitoring pricing behaviors and market trends would reflect back on your ability to make better data-driven decisions and take the lead in the market. For example, assume you are a new brand competing with established brands. In this situation, any information is a great deal for a new brand like yours. You want to understand what your competitor is selling when they sell, and the promotions and shipping options they provide. With this information, you create an opportunity to suggest similar products and influence the consumers to switch to your brand. This is how scalable data impact your business.
3. Preparing an action plan to set yourself up for long-term growth
The last and most critical step is to take action. It will do you no good if the collected and analyzed price data are sitting and building up with time. Data with no plan of action will soon become irrelevant. With the available resources, you can collect enormous amounts of data; it will be useless if you don’t immediately plan your next steps. For example, collecting data on ski jackets in December and waiting to analyze it in May will do you no good. Since the prices after five months are irrelevant, and no one is looking to buy ski jackets in the middle of spring. To make the best of your collected data, you need to act on it in real-time and not months later. When you see a rise in the prices of any product, act quickly by offering something better in terms of sales, promotion deals, and coupons. Acting immediately, armed with the price information, will increase your sales and get new customers. Hence, pricing intelligence can boost your sales if you soon act on the acquired knowledge.
Conclusion
As a retailer, it is your job to apply an effective pricing strategy that can shift based on the latest insights on your rival’s data. With pricing intelligence, one can effectively manage their price position in the competitive market, figure out the margin pressures, and enhance profits in their particular category of products. Everyone else is already doing it. It would be wise to stay ahead in the game and prepare yourself for long-term and sustainable success with the help of the tools available in today’s digital world.
