10 Ways to Maximize Retail Profit Using Price Monitoring Software

Posted by Vikash Rathee on Mon, 08 Dec 2014 14:18:54 GMT

10 Ways to Maximize Retail Profit Using Price Monitoring Software

As the eCommerce superhighway gets more congested and competitive, online retailers must find ever-more-innovative ways to attract customers and make sales. Pricing intelligence tools have quickly become essential to rapidly access and act on data on pricing, product availability, shipping charges, promotions, and the like. You need quick access and analysis of the competitive landscape by category, brand, or any other breakdown that suits your needs. You can then use the intuitive user interface capabilities to quickly hone in on specific pricing opportunities. Thus you need to have a price monitoring software that could help you outsmart the market. Here are 10 ways to maximize profits using Competitive Price Monitoring:

  1. The software should manage the monitoring of the competitor’s pricing online so that you don’t have to do that. Define email alerts to keep a close eye on changes in the market and gives you real-time notifications so you are the first to know when your competitors change their prices and add/delete products. The software should provide sophisticated, real-time competitor monitoring and price optimization. Gather information about all your competitors in the user-friendly dashboard and adjust your prices automatically to any changes in the market.
  2. Make sure that you have a clear view of your market so that you can optimize your pricing plan of action with real-time and historical views. Is your pricing strategy truly competitive, based on accurate, ever-changing information? Make sure your price monitoring software solution makes all this possible. Historical views enable you to compare comparable periods and competitive pricing dynamics, providing additional insights for devising current pricing strategy, tracking price changes, evaluating market behavior and informing you in real-time of important pricing events.
  3. Monitor To See If You Are Charging Enough. Accumulating daily price information allows retailers to map and chart price history and dynamics, i.e. the progress and development of prices over time, which helps view reaction to your own price changes, gain visibility into your competitors' pricing strategies and tactics and set optimal price points.
  4. Is the data "quality assured”? While pricing intelligence tools automate the process of collecting data, human-based quality assurance is still necessary to verify and ensure 100% accuracy. Even the smallest mistake, mismatch, or error will throw off your data – and the value of your insights.
  5. Use competitive pricing strategies and follow the result closely. Raise Your Prices And Monitor To See What Happens. Effective pricing can make or break a business. Selling a well-established product at a similar price to competitors is an option for small retailers who want to draw customers to their businesses. Keeping customers there, however, often means distinguishing themselves on bases other than price. Vendors use a competitive pricing strategy when several other businesses sell the same product and there is little to distinguish one vendor from another. A market leader will generally set the price for the product and other vendors will usually have no option but to follow suit in order to remain competitive. Vendors will either match the pricing of the market leader or set prices within a comparable range.
  6. Use Competitive Price Monitoring To Suit Consumers Who Like To Have Choices In Their Buying Decisions. Customers like to feel they are in control of what is important to them. Plus, the more choices consumers have, the more likely they will choose a higher-priced item -- and find the money to pay for it.
  7. Don’t get involved in the run to be the lowest but do it correctly. Example a retailer might be quoting the price which is lowest for a shampoo say 145, while he realized his competitor is quoting it at 152. He could still increase the price making it to 150 while still being lowest in the market but increasing the margin by 5. Thus it is said the rule is not to price it the lowest but correctly.
  8. You must track your competitors' prices with price monitoring software and determine how you can position your offerings to appear more compelling. This could mean offering sales at times of the year when most companies are raising prices. Or it could mean using email lists to craft urgent messages that draw customers during busy shopping times. If you want to compete on price, you’ll need to know when exactly is the best time to raise or lower that price. The best way to know is by following your competitors' price changes through the use of a price monitoring service.
  9. Price Higher by Finding Additional Value in Your Product In retail, you cannot control natural demand for products and services, but you can "manufacture demand" to stabilize your business. Be careful when you do battle on price though. 52% of in store purchases are influenced online.
  10. Recognize Cost Efficiencies By Analyzing Your Price Monitoring Data. Find other ways to save money or make more money on each order. Break down each order by customer, product, price, and order size to figure out where money is being saved or lost: Examine your prices and sales to see if some customers were placing only very small orders of some lower-priced items. By the time your salespeople take the calls and locate the products, you are already losing money. If it costs $30 to make a trip down the supply aisle, make it worth more than that for a customer to place such a size order. In essence, offer customers a price break for ordering more products at the same time, and you both benefit!

Pricing intelligence solutions are not all the same, nor are the price you pay for these services. Retailers should understand what is possible, what is being offered, and the corresponding value and cost. There is so much talk about the fiscal cliff and consumer uncertainty these days. Luckily, pricing is one key lever that you can almost always pull to stabilize your business and, thankfully, price tracking software is available to aid with rational retail pricing. A 1% increase in price can lead to an 11% increase in profit. The pricing intelligence tool helps online retailers be savvier, competitive, informational and timely, resulting in positive purchasing decisions by consumers.

About the author

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Vikash is the Founder @PriceTree (a price comparison site for shoppers and retailers) and loves business intelligence solutions & online marketing.

Read his Latest posts or follow him on Twitter.

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