People receive deliveries from all across the globe after doing online shopping. The global eCommerce market size reached a whopping $16.6 Trillion in 2022. So, just imagine how aggressive the online business might have become to have reached this goal in just a few years. It is not a hidden fact that the e-commerce industry is fast-paced and constantly evolving so that the customers get tempted to buy their products.
Now, for buyers in the era of the internet, it is common to visit a few websites before making the final purchase to find the best price for the desired product. Yes, comparing price, features, aftersales services and add-ons is not uncommon. Though as per studies, pricing is a prime factor affecting buying decisions of at least 74% of buyers. On an average, a potential customer will visit 3 websites before making the buying decision.
This is the reason why e-commerce giants such as eBay, Amazon, Walmart, etc., change their prices every 10-12 minutes. Yes, it is that instant. Amazon is known for changing the product prices 2.5 million times a day. The cost of a product will change every 10 minutes. It is here that price intelligence comes into the picture.
In today’s blog, we will understand the role of price intelligence in the eCommerce business. We understand that you need simple answers, so we will jump right in.
Businesses are taking resort to price intelligence for staying competitive in the market and making accurate pricing decisions. With the help of price intelligence, e-commerce businesses get valuable insight into various aspects such as pricing strategies, customer behavior, and more. It enables them to compete effectively in a competitive market.
Pricing Intelligence Tool Improve Company’s ROI
1. Competitive Perspective: In the existing e-commerce scenario, retailers constantly look for ways to get an edge over the competitors. Pricing intelligence tools can help a business optimize its pricing strategy and improve the ROI by setting competitive prices, analyzing the effect of price changes on sales and profits, and keeping an eye on market trends.
2. Staying Updated: Features such as automated repricing and competitor price tracking offered by the pricing tools help a business in staying ahead along with optimizing the profits. With the help of an e-commerce pricing tool, an e-commerce business can expect better conversion owing to informed pricing decisions.
3. Pricing: Pricing tools enable businesses in setting the right price by leveraging the technologies such as AI and machine learning. It prevents businesses from overpricing their products which can result in lost sales or customer dissatisfaction.
Significance of Pricing Tool in Online Business
With more and more buyers switching to e-commerce portals for shopping, one of the biggest challenges facing the e-commerce industry is setting optimal prices for their products. It is essential to make the right pricing decision as it can make or break a business. Setting a wrong price can either lead to a significant monetary loss or too much competition.
1. Optimized Pricing: There are several benefits of practicing price intelligence for an e-commerce business. Price intelligence helps a business in avoiding undercutting the prices and losing prospective customers. It can help a business optimize their prices for maximizing the profits. Price intelligence helps a business in informing about their marketing offers and targets their audience efficiently. Price intelligence can also help a business in negotiating its terms with suppliers.
2. Identify Opportunities: By utilizing competitive price intelligence to its fullest potential, businesses can not only identify opportunities to bundle their products but also gain insight into their competitors' pricing strategies, enabling them to offer more value to their customers through strategic pricing decisions. For example, a company selling shoes can consider bundling socks with its products for creating value and making the offer attractive. Now, bundle offers, and combo offers to go a long way during a particular sales peak. With the help of pricing intelligence, you can identify the sales graph and buying tendencies of your target customers. It helps in providing the best products and services when needed the most.
3. Market Dynamics: An e-commerce business can stay ahead of the curve when it comes to industry changes and trends. With constant price monitoring, business identifies changes in the consumer demand and creates strategies to respond accordingly. It is important in fast-paced markets such as e-commerce where new services and products are constantly introduced.
4. Gains: Profits are what every business aims at. Being in such a competitive market, profits can be very tricky. But companies do everything in their capacity to understand the lags between the market demand and its potential to reach that demand in an efficient manner. That’s where pricing intelligence software like PriceIntelGuru’s come into the picture. We can help you scale the business in the right direction without losing focus on the bottom line. And as a company that needs to create a change in the market share, that’s exactly what you need.
5. Better Customer Insights: Customers have changing preferences, sometimes it is about defining their needs. For instance, X wants to buy a $500 smart TV but has a budget of say only $300. Now, companies who sell only $500 and above should not target this customer but the companies in the range of $200 to $300 should. And pricing intelligence helps you understand the buyer preferences with in-depth analysis and insights.
6. Timesaving: In every business time is money. Putting in that time is your investment. So, conducting tedious and long hours of research can consume so much of your time. With pricing intelligence, you can do so much more and deliver the best product or service to your customer. Losing valuable customers will not be a question then. Pricing intelligence can help you stay updated without being on the platform as the complete system is automated.
7. Enhanced Inventory Management: If you are into an online business, then you know inventory management is a real task. Imagine, if you knew the demands of different demographics and stocked only those products, how easy will it be for you and your team? Well, with pricing intelligence it is not just a dream. PriceIntelGuru has varied structures to keep your inventory monitoring at bay. Pricing intelligence tools provide insights into the demand and popularity of products, allowing eCommerce businesses to manage their inventory more effectively. By tracking product availability, businesses can avoid stockouts and reduce the costs associated with excess inventory.
Apart from the above-mentioned benefits of price intelligence, businesses can build trust and credibility with their customers. With a competitive price and clear value proposition, they reflect a commitment to offering a high-quality product at a fair price. Thus, price intelligence plays a crucial role in the e-commerce sector.
Choosing an Optimum Pricing Tool
The pricing tool needs to update product information and the desired price point. The tool then generates a list of comparable prices which other businesses in the market are charging for the comparable products. Retailers adjust their prices as required till they identify a good spot which can meet their profit goals along with customer satisfaction.
Price intelligence tools analyze the market and collect important data from competitors. It empowers the retailers and improves their pricing strategy to offer them competitiveness which increases conversion. Through competitor price tracking, price trackers scan the competitor's products several times a day and offer the retailer relevant data that assists in improving the pricing strategy and adjusting the prices
When a retailer gets access to updated and relevant data along with a detailed insight into the major competitors, it categorizes the data for optimization of the pricing strategy. With accurate and in-depth analysis of the competitor prices, retailers can make justifiable decisions about price adjustments for their eCommerce stores. They can easily determine the optimal prices for their products. The end result is increasing conversions.
As per research, price management initiatives have the capacity to increase a company’s profit margins by 2 to 7% in a span of 12 months, offering ROI from 200 to 350%.
Having a great product basket leads to excellent options. However, pricing is an important consideration. Customers apply price bracket filters while shopping which means that the best products from a company might fall out of the suggested price range. It can lead to overstocking or discounted options. Thus, price optimization and planning tools and software help an e-commerce business in ensuring that its products get sold on the websites or apps at the best prices for generating more revenue and ROI.
Create Value and Net Worth with eCommerce Price Intelligence
If you wish to set the right prices for your products, create value for your customers, and stay ahead in the industry, price intelligence tools can help. There are several pricing tools in the market. A little research will help in finding the right tool that meets your needs and fits your budget. A great pricing intelligence tool is just a few clicks away. Book a free demo of our tool today.