The three keys to electronic commerce could be summarized as: price, price and price. It may seem as an exaggeration, but the importance of the price in online sales is decisive. And although it is true that the user experience is becoming increasingly important, for users online shopping is an online comparison for competitor prices.
Users browse, review, compare, confront with a click and in just a few seconds. An online store can have a well-built proposal, propose a different experience and have interesting products; but if your prices are not adequate, you will not be able to convert. You will lose a sales opportunity in one click, and many times without even having been aware of having lost it.
What is price monitoring?
The ability to adjust prices does not mean having the ability to lower prices, but the ability to understand the best way to manage the price in a highly competitive environment such as electronic commerce.
If prices have become decisive, what is needed is price intelligence, competitive intelligence, a strategy for monitoring internal and external variables that influence the price to make decisions that increase sales.
Price monitoring has an essential internal analysis component. You have to study the internal sales data, product rotation, historical trends, and impact of promotions or brand value, among other important variables.
But the equation of price monitoring is completed with external analysis. Monitoring involves analysing competitor prices, making a detailed follow-up of the products and the promotions of the competitors. These two united parts are those that offer a complete scenario to make informed decisions about the price.
Why monitor the competition
The key to monitoring competitive prices is to understand your strategy and anticipate your actions. And, in this sense, monitoring provides valuable information of three variables: prices, products and promotions.
Any online price modification of the competition can be identified with the appropriate monitoring tools. This allows us to know their movements, their pricing strategy and react accordingly to continue maintaining competitive prices.
The variations of the prices of the competition that are detected by monitoring do not mean that this competitor is changing its prices in the long term, they can be discount sales for a new launch, special discounts or other promotional actions. Therefore, by monitoring the competition your campaigns and promotions can be better understood.
In addition, always with the right monitoring tool, the technology allows you to detect the movements of the product catalogue in many ways: new references, removal of old references, update of descriptions, stocks, etc. A competitive monitoring strategy offers key information about the competitive product assortment.
How to do price monitoring
Without technology it would be impossible to monitor prices, therefore, choosing the right tool and provider is essential to implement a strategy that turns into tangible results. But in addition to price intelligence tools, an electronic commerce needs to have three very clear questions: the direct competitors, the suitable assortment and the analytical attitude.
Defining who the most relevant competitors are is very important for a monitoring strategy. It would not make sense to analyse all the players in the sector, but only those whose actions have or could have real influence on our business.
Once the competitors have been defined, the next step is to establish which products are to be motorized. In some way, it is a decision similar to the first and we must find the balance between analysing all the products and analysing only the most relevant products for our own assortment.
The last question is as relevant as the previous two; it would be pointless to define competitors and products if it is not done with the appropriate analytical attitude. This attitude is not a declaration of intentions and has to be reflected in a work process that goes from deciding the frequency of the analysis to the way of treating the data to get the most out of it.
The three keys to competitive e-commerce can be summarized in an attitude: analyse, analyse and analyse.