Why eCommerce Stores Need Price Intelligence (and How to Start)

Pricing your products is one of the most important decisions you have to make at every step of your ecommerce journey, whether you are a beginner wanting to get involved in the online retail industry or an established store trying to elevate and scale your business. That’s where the ultimate help that every ecommerce store needs comes in: price intelligence.

Price intelligence offers competitive insights to help merchants determine the optimal product price by automatically gathering actionable information from the market. It allows online retailers to adjust their prices in the fast-paced ecommerce environment where shoppers are price-sensitive and bombarded with better offers.‍ 81% of retail shoppers browse for the products they intend to buy before making a purchase, making automation no longer optional in ecommerce. 

Why Ecommerce Stores Need Price Intelligence

A survey conducted among 1,000 US consumers showed that 43% of the participants shop at least once a week, and 30% shop at least once a month. So, businesses must stay on top of their game and fine-tune every aspect of their business processes to keep up with the competition.

Price intelligence can help you choose the right pricing strategy to implement according to your business objectives. There might be a lot of online businesses to compete with, but numerous potential customers out there can also buy your products. Having the pricing data of your competitors allows you to improve your prices continuously and be profitable with dynamic pricing adjustments.

Common Pricing Challenges without Intelligence

Executing ineffective pricing strategies can affect your business’s potential profits and, more importantly, hurt customer trust. Customers determine the value of your products by price, quality, and brand image. If you haven’t implemented competitive pricing intelligence, you might be losing profits by not matching your product’s perceived value with customer expectations. When customer expectations are unmet, it will directly affect their purchasing decisions. What do we mean by that?

Successful businesses use pricing information to provide the best prices to prioritize customer satisfaction. In order to be successful in ecommerce, you have to find products that differentiate your business from the crowded ecommerce area, whether in terms of unique prices or offerings. Another main point is that you need to keep an eye on competitors across various channels. Leveraging a niche product catalog can help you stand out because if not, there will be lots of other stores that can provide the same items at a much lower price point, leading to price competition that you will not likely hurdle with manual price adjustments.

You might think offering the cheapest prices is the best. However, if your prices are out of sync with those of your competitors, the customers can psychologically associate your low prices with lower quality, especially if equivalent products are positioned at a higher price point. Creating a strong brand image is highly advised, yet you need to price your products by monitoring the market and your competitors to increase the perceived value of your products. Remember, if your products are perceived as low quality once, it will be much harder to change perception after a time, which will hurt your profits and business.

Observe the market and competitor strategies to gain a competitive advantage. Research successful stores to find unique value propositions that you can offer as well, such as ethical resourcing, organic materials, etc., while you develop your product catalog; this way, you can justify charging premium prices for your niche products and have healthy profit margins. If the consumers believe your products are worth investing in, they will not hesitate to pay multiple times more than the other competitors. In short, you need price intelligence to offer the right prices and products to the right people. So, how can you overcome these challenges and start using price intelligence? Let’s see.

How to Get Started with Price Intelligence

Identify your Competitors and Prioritize your Key Products

First, you have to identify your direct competitors. Being competitive in ecommerce heavily depends on increasing your market position, turning your competitors’ weaknesses to your advantage, and having a thorough understanding of your direct competitors.

Secondly, you must work on choosing the products or categories that require close monitoring. In order to compete on price, start by selecting some of your high-potential products or product categories that you believe you can gain the best market position and profits.

Use Competitive Pricing Tool

After you have gained confidence about your competitors and product catalog, the next step is to choose an automated tool like Prisync. To start, you have to list your products and upload them to the system. The software retrieves the prices across all of your competitors; then, you can manually add the direct competitors that you want to keep an eye on as well. The benefit of using competitor tracking software is that you will receive alerts when competitors change prices, allowing you to take action quickly and focus on perfecting your pricing strategy.

Once you start the automated price tracking process, you are free to use the smart pricing rules to save you extra time without worrying about your prices. If you want to beat your competitors in terms of price, you can set a price rule so that, for example, you want to be a certain percentage lower than your cheapest-priced competitor. It is not an easy task to find the right price point without racing to the bottom or missing some opportunities among thousands of other ecommerce merchants. Conduct A/B tests and try out different pricing strategies with smart rules to make sure your prices are on point and you have higher profit margins.

Being Competitive with Stock Tracking

It is also beneficial to track competitors to know what other merchants charge for similar products or if they are out of stock. Still, it is best to find your niche and differentiate your business’s offerings so that you do not have to deal with your prices or stocks aggressively, and let your customers choose you despite higher prices.

Nonetheless, price monitoring and dynamic pricing tactics are must-haves for scaling your business if you sell a high volume of products with lower margins. In that case, using an automated price tracking software like Prisync is very important to set and adjust prices automatically when market prices or stock availabilities change. If they are out of stock, make sure your products stand out without cutting your profits. Price intelligence tools can help you avoid potential underpricing or overpricing errors that could hurt your margins or sales.

Conclusion

Having the perfect products for your store is a great start, but it is not enough in the highly competitive ecommerce landscape. Pricing is an ongoing process that affects your profits and customers’ buying decisions. Successful ecommerce businesses rely on price intelligence to work with quality data, offer the right prices at the right time, and create measurable outcomes. Since the prices are transparently open to all buyers on the Internet, the competition is getting harsher each day, and businesses need to stay in control of their prices with momentary adjustments and competitor monitoring.

Whether you’re an online merchant who is just starting ecommerce or aiming to scale your business, price intelligence allows you to price your products confidently and with flexibility, which helps you maintain customer satisfaction and higher profits in the long run. As you can see, price intelligence is not optional anymore; the sooner you start implementing it, the sooner you can create a sudden benefit to your store and take control of your pricing.