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.