85% of online shoppers compare different ecommerce prices before deciding which product to purchase. For digital buyers buying online means buying, it's as simple as that. Therefore, if the prices of your ecommerce are not similar or better than those of your direct competition, the sale will be for your competitor, it´s that simple.
Understanding this competitive scenario is a very powerful reason to monitor the prices of your competition, it is essential to understand the ecosystem in which you move and what your conversion opportunities are. But it is not the only reason, there are some more...
The marketing reasons and the 3 P´s
From a marketing point of view, monitoring the competition offers valuable information about the three big P's of e-commerce: prices, products and promotions.
1. First, price, which, although not everything, is the most influential factor in the purchase decision. When competitive prices are monitored and both historical and real-time analyses of their prices are carried out, a real competitive landscape is achieved. It is the ideal way to find the best selling prices, which are associated with the positioning of e-commerce marketing.
2. Secondly, the products. Monitoring the competition means getting information about your complete catalogue of products, allowing you to have a view of both the assortment and stock. This vision is valuable information to understand the digital merchandising policy of other ecommerce and to know to which category they give more importance or in which product to put more effort in to give it visibility.
3. Third, promotions, which are the result of combining price and product information. If price behaviour is monitored, the detection of downward trends may foresee an aggressive discount policy. If stock increases are detected, for example, the launch of large-scale promotional actions will be anticipated.
But it's not all marketing in e-commerce. An online store is a more transactional aspect, it needs a regular flow that follows these steps: traffic, landing, search, selection, add to cart and purchase.
When monitoring the competition and, moreover, when this information is crossed with internal data, it is possible to give very efficient responses to market trends (with new products, for example), to the seasonality of the sector (with promotional campaigns, for example), the management of purchases and stocks (process optimization), are three other more powerful reasons to monitor the competition.
Where to start when monitoring the competition
Monitoring the competition can seem like a very complex task, but fortunately technology makes the complex simple. A competitive analysis tool allows you to track and store price data (nominal, discount in percentage and in figure, offer, etc.) and of products (names, descriptions, images, stocks, etc.).
With the right technology, you simply have to follow a process like the one that we will propose below:
• Select the right competitors. It is not necessary to select all the companies in the market, but the ecommerce that are considered relevant competitors. This selection is key because otherwise you could collect information that is not valuable to you.
• Identify the correct product assortment. This point may be even more important than the previous one. An ecommerce does not necessarily compete with other ecommerce with the same offer, so the relevant thing is to detect products in which it competes and monitor them in an integral way.
• Define the frequency of follow-up. Deciding how often to track data is an important decision, since after collecting the data you have to analyse it and an internal process is necessary to convert that data into something valuable. Follow-ups too frequently can create bottlenecks, opportunities can rarely be missed.
• Analyse the data and transform it into actions. This is the crucial point of monitoring, it is necessary to define which vision of the data brings more value. Trend analyses, for example, are very useful for understanding long-term price policies, while spot alerts are very useful for reactions with short-term tactical actions.