Competitive repricing software has become an essential tool for all retailers, manufacturers and marketing execs when it comes to excelling in the eCommerce business. However, as the market has grown, so has the standard required from the service providers.
The number of online retail businesses has surged in the past decade, to the point where it has become almost impossible to search out competitors manually. To accurately and comprehensively keep track off your competitors; you need to apply automation. Otherwise, you will spend more money on people to manually search than you can save by competitive repricing strategies.
Your choice of repricing software will depend significantly on your business, the type of business, the extent of your product ranges, and what you expect to get from your competitive price monitoring analysis.
It will also depend on the service they provide and how intricately you want their comparison to delve, in the search for your competitors and their pricing strategies.
Primarily, you have to be sure that your repricing software is accurate and precise in the data it returns. A high percentage accuracy rate is vital to ensure that the suggested repricing strategy will be useful.
Most repricing software providers offer an initial trial or freemium version of their platform; it is a good place to test the accuracy of their returned data in respect to your business.
To provide an example if you have 15,000 SKUs to compare with the competitors in your market, and the returned data is only 75% accurate, that allows for 3,750 products that could be erroneously repriced from poor data accuracy. Potentially, allowing for significant losses in your revenue stream.
Creating secure environments for shoppers has meant that internet security has become second nature to website creation and maintenance. That same website security is being used to protect competitor data from the simpler web crawlers and bots that want to parse that information.
Sophisticated algorithmic searching can closely mimic the interaction that a human person displays when searching a website for information; allowing for a more accurate and more sensitive approach to altered data, such as allowing for price discounts, stock numbers and flash sales.
These intelligent machine learning engines tend to be more expensive than simple price comparison bots. However, they do return more accurate data on which to base your repricing strategy.
The competition monitor that you eventually choose should be able to search the market for other potential competitors, as well as the ones you already know. The last thing you want is for a hitherto unknown retailer to catch you unawares because you didn’t know they existed.
Price isn’t everything, and if you expect to improve your profit margin by merely reducing prices below anyone else, you are on the fast track to bankruptcy. A race to zero helps no one and damages brand image, trust, and perceived value.
To accurately pinpoint the competitors with whom you should be competing, as opposed to those with who you shouldn’t bother, you need a more holistic repricing software approach to competitor monitoring. Rather than only focusing on the price for which they offer the same product, you should also take into account their proposed shipping times, their stock levels – and then going deeper how much they charge for expedited shipping and the countries to which they provide their products or services.
Another necessity should be the ability of the software to track attributes and additional information. The rise in private production labels with no universal identifier leads to a vast number of unmatched and potentially competitive products evading your detection. If there is no UPC for an item, and the available information doesn’t exist to compare it with your product they can undercut you and provide a similar or virtually identical product without you even knowing that they are stealing away your clients. The ability of your chosen repricing software to search attributes is important.
Its all very well for a repricing program to suggest prices below all of your competitors, but that doesn’t help you if that will send you into the realms of bankruptcy, violate your MAP, or mean you have to lay-off staff to maintain it.
You need a repricing software platform that will take into account your lowest minimum prices, across your product ranges, and identify the specific competitors with whom you should compete.
Even in the dynamic and cutthroat realms of online retail, there are still some competitors with whom it can be damaging to try. Amazon, that massive retail empire that has dominated the eCommerce landscape, Overstock.com, and several others have the profit margin to swallow a few losses when it comes to undercutting smaller businesses. There is a compelling reason why high street retailers refuse to price match with the big eCommerce names; it’s just not worth the headache that competing with a giant that can change prices every ten minutes. Amazon has built its success on the very basis of dynamic pricing that is only now being used to increase profitability by the rest of the retail sector.
If you are paying a repricing software provider to assist in improving your bottom line through price adjustment, you don’t want it to create more effort and increased staff hours so that it can work.
You probably have business and product management tools at your disposal already, and can generate all of the required information from a single data export, finding a repricing software platform that can import your data will save you time and money.
Not that ranking sites and reviews aren’t a great place to start, but only if the people reviewing have the same priorities and businesses as you, and even then there is no guarantee that you want the same things from competitor monitoring and pricing software. Competitor monitoring is becoming as fluid and dynamic as the retail industry, and some software providers perform better than others where different variables apply.