If knowledge is power, market knowledge is the key to commercial success!
In real life, though, and in virtually every industry, online businesses have to compete in a global marketplace, where there are more and more merchants every year selling exactly the same products. Competitive pressure is steadily increasing, especially in online trading. There are hardly any article or product groups that are not on offer by at least ten other online merchants.
In this interview, Dennis Pflie, pricing expert, explains how retailers can assert themselves in increasingly intense competition.
Dennis, what factors influence consumer behaviour?
Remember, knowledge is power! In order to sell successfully, you should not only try to understand consumer behaviour; you should also know what the competition is up to and keep an eye on the market. What are your competitors’ prices? What are your competitors’ delivery times? It’s definitively an advantage to know your competitors’ reviews. Most customers who shop online read reviews before deciding whether to trust a retailer in terms of quality and reliability or not. Positive reviews inspire confidence. People are generally willing to pay higher prices for a product from a shop which has a good reputation instead of buying it from the cheapest retailer. Positive customer reviews increase sales and can help you differentiate your business from your competitors.
Price is not the only critical factor that determines whether an online shop is successful or not. Nowadays, you will have to beat your competitors in all of these criteria. Only those who keep an eye on all key market factors can react quickly and gain a competitive edge. Knowing your market and competition is crucial for your business. Success or failure of an online retailer may depend on it.
Is strategic pricing the new secret of success in e-commerce?
More and more online retailers change their prices several times a day. This is especially true for fast-paced industries such as consumer electronics, tools and fashion. In order to be competitive and stay on top of the game, it is necessary to take into account price fluctuations in the market when determining the price of a product. Getting a market report helps merchants decide what the best price is for their products and thus, ideally, be one step ahead of the competition. Information gained by monitoring competitor activity and individual product demand and supply can be used to set optimal product prices. For example, if a competitor were out of stock on an item, the retailer would notice and could, ideally, slightly raise its price. Online retailers benefit greatly from this market knowledge and expertise by taking advantage of price differences on the market, thus undoubtedly gaining a very important competitive edge.
What are the advantages of an automated software solution?
Systems and tools that facilitate pricing processes will, above all, ensure that you save time, lifting the burden of manually tracking competitors in order to get market data. The benefits are twofold: an increase in operating profits and the possibility of reallocating human resources. An automated pricing software provides the retailer with market and competitors’ data from all channels. You can also choose to track a specific competitor’s shop directly.
How can parsionate’s “price inteligence” solution help retailers stay ahead of competition?
Our solution, “priceintelligence”, significantly helps to improve our customers’ daily business operations. They simply import their product range of articles into the SaaS platform. Our software will then automatically scan the selected online market places and provide the required market reports. Thus, users will be able to monitor specific competitor market data, such as prices, shipping costs, delivery times, availability and customer reviews and adjust their prices accordingly. priceintelligence will also automatically suggest prices, taking into account customizable pricing rules, e.g. minimum selling price or intended position on the market place.
The market monitoring platform “priceintelligence” is the key to success for online retailers.
What is the initial effort to set up this kind of priceintelligence?
This is one of the main advantages of our offer: since it is a SaaS solution, we don’t need to implement any new interfaces. We just need a list of all articles in an Excel file or in a CSV file. We will provide the first reports within 24 hours after placing the order. Our pricing is quite simple: most customers choose a flat rate for 12 or 24 months.
The interview was conducted by: Ida Lorenz