How to protect yourself from low-price competitors

10/12/2020

Angela de la Vieja

Over the past few years, low-price giants have become major players in all distribution markets, including online. They operate using a business model that allows them to survive, even with lower profit margins, by minimising overheads. As a result, the fight over prices is undoubtedly one of the factors that generate the most headaches, especially when it comes to preserving your profit margins.

Keeping track of the competition with a monitoring tool is a must for any business that doesn’t want to lose its market share, allowing you to monitor the pricing strategies used by your competitors, analyse tendencies, and overcome them. But, how should you act to ensure that you won’t lose customers and that the profitability of your business remains unaffected? In one way or another, a price monitoring tool will offer a lot of support when it comes to setting your strategy.

✔ Emphasise your strengths.

Highlight those areas that your clients really value about your business and make them known. The customer should understand why your business sells a product at a higher price than your competitors. The idea is to create brand value that makes up for the consumer paying a higher price. In the end, you’re selling value, not price, and this will make you stand out in a sea of cheaper competitors.

✔ Adjust your prices.

While it may be difficult to narrow the price gap with your competitors, ensuring that the gap is as narrow as possible is vital. You can do this more selectively by focusing on the products with higher elasticity, for example. Above all, avoiding falling into a constant trend of downward prices is essential, which is one of the most frequent errors in pricing strategies and can affect your profitability. Another good idea would be to back up this price reduction through cross-selling other, related products, helping to improve the sales margin of the main product and compensating for the change in price.

✔ Redefine your market.

One specific niche will rarely be an attractive alternative for a large company. Focusing on one sector, in particular, in order to create the appearance of a specialty shop can be very profitable. This will allow you to direct your efforts towards potential customers that meet all of the prerequisites for being ideal customers.

✔ Anticipate the future.

Developing an effective defence against the low-price competition can be long and arduous. The time that we’ve spent studying the competition to put a strategy in place will be crucial to ensure its effectiveness. Having a competitor price monitoring tool will clear the way and assist you in your decision-making process, allowing you to study different variables related to your competitors to decide which would be the most viable and profitable solution for each case. As with so many other issues that may arise in a business, planning ahead will be the key to success.

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.