Three opportunities for improvement in manufacturers' pricing policy

29/06/2017

Angela de la Vieja

The purchase of products through the internet has meant a huge opportunity for manufacturers and product distributors. Thanks to new digital channels, such as marketplaces or ecommerce, many manufacturers have succeeded in getting their products to reach more people and to the most remote corners of the planet.

The challenges of a digital ecosystem that moves at the speed of vertigo are increasing, and even more so for those classic retail sectors, that travel as fast as they can their way towards the digital transformation.

One of those challenges, faced by manufacturers of all kinds, is the price policy of their products. A sensitive subject in itself, and on which one must act differently...

How to be efficient, accurate and agile

The speed of the Internet to digital businesses should reflect on how to make more use and for technology to be more efficient, more accurate and more agile with pricing policies.

1. Simplify the pricing structure

No matter how complex the pricing method of a product is, the processing and storage capacity available in the market makes it possible to optimize the calculation. The key is that digital distributors, ecommerce and marketplaces think in terms of campaigns, which need to be implemented in a simple and record time - long term for e-commerce is measured in days.

Ideally, the price structure should be simplified to gain efficiency, but if the structure is complex, with the right technology you can get faster proposals, simpler offers and more effective sales.

Ideally, the price structure should be simplified to gain efficiency, but if the structure is complex, with the correct technology you can get faster proposals, simpler offers and more effective sales.

2. Investigate consumer behaviour in alliance with the distributor

The products may seem wonderful, but the final verdict depends on the customers who end up buying them, as it has always been. The key differentiator is that the digital behaviour of users at the time of purchase is subject to many more influences than in the physical environment, among other things, because the competition is a single click away. In this way, the digital retailer can provide valuable information about buying behaviour in ecommerce and not just about the preferences of one product over another; you can also go deeper and detect from price sensitivity to the conversion rate according to the location of the product in the catalogue.

The challenge for manufacturers is to find ways to jointly research with ecommerce and distributors the behaviour of prices, especially in large and highly segmented markets. That is why it is so important to do an analysis of the competition.

3. Monitor prices

Marketing products in the digital environment can give the feeling of uncontrolled prices, but in reality it is not so, simply the digital dynamic is different to the physical.

A hashtag on Twitter, a comment on Facebook, a photo on Instagram or a video on Youtube can affect the demand of a product in a few minutes. And, of course, ecommerce wants to take advantage of viral phenomena to offer special promotions or exceptional discounts.

In this scenario, manufacturers face two challenges. The first is to have flexible agreements with ecommerce, which allow them to have a reasonable reaction time from the perspective of the digital world; the second is to monitor competitor prices, which means using tools that allow them to have real-time information on the behaviour of prices.

In a fast moving digital ecosystem, technology is the best ally of manufacturers to ensure that agreements with their distributors are met. And more importantly: that the price perceived by buyers is the one the manufacturer had thought of for his product and for his brand.

11/11/2022

Consumer behavior: How can behavior tracking be effective for setting the right pricing strategies?

Behavior tracking is becoming massively popular today. As a result, pricing strategies born from studying consumer behavior are a merchant's dream come true. If done right, it can conquer every market for the business quickly. With abundant data available, the strategic makeover of the pricing models is becoming easy for companies.

What is behavioral tracking, and how is the data beneficial in pricing?

For a quick understanding, behavioral tracking refers to gaining in-depth knowledge and insights into consumers through their web data. Their browsing habits, spontaneous decisions, shopping interests, and preferences come under behavioral tracking.

How can enterprises use customer behavior data?

Companies can use customer behavior data as a tool to strengthen their hold on the market. A customer’s preferences, values, and tendencies allow businesses to work in sync with them through the collected data. Apart from this, customer behavior can also aid in:

Tailoring customer needs for customer retention

Personalization is becoming the heart of a company’s growth. No matter in which area an enterprise is functioning, tailoring the services, products, and solutions is becoming increasingly crucial. Uniqueness and personalization attract the crowd like no other.

Increasing the overall value

One of the best ways customer behavior data affects a business is by upgrading the value of customers for the business. The customer’s characteristics allow the company to target the people that match the business prospects well.

Optimizing every type of content

Everything that is up for digital display requires content. You must have seen companies unveiling their products or services through advertisements and making the initial public appearance. Two essential sales strategies – upselling and cross-selling comes through content optimization.

Pricing Strategy

Last but certainly not least is the influence of customer behavior data on the pricing strategy. The pricing strategy essentially constitutes content derived from data analysis. Companies need to have a dynamic approach to the pricing system to attract the right customers.

17/02/2015

Saint Valentine’s Day, always a good opportunity

V-Day is looming, a long-awaited date for all and also a good occasion for the eCommerce. According the study conducted by Prosper Insights and Analytics, it is forecasted the average consumer expense that day will be the highest in last years. Furthermore, 25% of them will buy online, which means an increase of 4% regarding 2014 (The US department of Commerce). This is, therefore, a key date where market competitiveness increase and which could be assumed as a big opportunity for our business or, a big fail if we do not adopt the correct strategies.

How to turn this event into an opportunity? To achieve this goal, we need to adapt our prices to this hostile environment, i.e. we need to develop an appropriate Dynamic Pricing strategy that allows us to adapt our prices to the variations produced in supply and demand and to position us ahead of our competitors. In V-Day, the frequency in changes will be higher, carrying it out each hour or even each minute. It is estimated that 65% of leader retailers have the ability to respond quickly at these variations, such Amazon. For this reason, it acquires great importance the correct use of a software specialised in price motorisation of competitors. Do not miss the time and adapt your business to new adversities.

28/12/2022

Which are the best footwear marketplaces to sell on?

Footwear marketplaces are booming. The last decade has seen the launch of new specialized marketplaces with millions of different users. Among them are Spartoo, Sarenza and Farfetch, portals with international reach. Their main value is that they unite hundreds of footwear brands, as well as offering clothes and accessories. Although each has its own characteristics, they are all vertical marketplaces, i.e., they focus on a specific area, and their sales categories are interrelated. For sellers, these portals provide an opportunity to expand sales channels and drive the globalization of their e-commerce business. We explain how to sell on these footwear marketplaces so that you can assess whether they align with your plans for the future and then start defining a possible pricing strategy.