Today’s retail environment is highly competitive. Consumers are increasingly price savvy, and eCommerce makes it easier than ever for buyers to comparison shop. For retailers looking to stay competitive and understand their relative position in the market, competition-based pricing can be the right step to take in the pricing journey.
A competitive pricing strategy uses your competitors’ prices as a baseline for establishing your own pricing. Understanding where your competitors stand allows you to make more strategic pricing decisions on key items, control your position in the market, and drive more revenue.
Using a market-based strategy allows retailers to better serve their customers and stay relevant. Without competitive pricing data, you could be pricing too high and losing sales, or too low and losing margins. With a fuller view of the competition, you can make informed pricing decisions that will meet customer expectations on the items that matter most. Plus, it provides a better foundation for defining your consumer price perception.
Comparing prices with competitors also enables retailers to recognize their position in the market. Are you leading or following? Which of your competitors are adjusting their prices to match your changes. Competitive pricing insights provide a comprehensive look at the overall market that retailers don’t have access to otherwise. For many of our Revionics customers, it provides an “aha” moment, helping them to identify patterns and trends of how competitors are moving and looking at their pricing.
Another benefit of a competitive pricing strategy is that it opens up new capabilities for retailers to drive strategic pricing actions. Market insights help retailers identify potential margin and revenue opportunities, give visibility into best sellers and unique products, and track marketing pricing trends.
It goes without saying, but running a successful competitive pricing strategy requires in-depth data on your competitors’ products and pricing; everything from product quality, to discounts, stock levels, price indexes and more, plus tracking how it all changes over time.
“The first step to market-based pricing is to determine what items are most important to be competitive on, and who you need to be competitive with,” said Gillies. “This will ensure you are making decisions based on the data that matters most and focusing on the products most likely to impact revenue and consumer pricing perception.
Retailers that truly want to be competitive with their pricing need to have extremely accurate, up-to-date information on their competitors’ prices. Equipped with the right solution, retailers can establish processes for pricing best practices and improve customer price perception. Leveraging competitive pricing information also provides a strong foundation for using Artificial Intelligence and data science for price optimization.
Competitive Insights is a Revionics solution that can help you get the most out of your market-based pricing strategy. Our competitive data analysis includes detailed dashboards and visual reporting so you can glean the best information to drive merchandising strategies and deliver precise pricing across all channels.
At Revionics, we use a unique “User Emulation” approach to search through competitor information the way a consumer would, giving you higher accuracy, broader reach, and more relevant results. Even if a competitor doesn’t carry the exact same item, our Competitive Insights tool uses similar attribute matching to identify comparable national brands as well as private label products.
Plus, Revionics provides daily updates on competitive pricing, so you can adjust to changes and capitalize on opportunities faster. Having real-time competitor data is key to running a dynamic pricing strategy. With Competitive Insights, you can leverage science-based analytics to confidently decide when and how to react in seconds.
For many retailers, competitive pricing can be the right first step towards price optimization. Maybe your current strategy is margin driven, and you’re looking to be more competitive. Or perhaps you need competitor price information to make dynamic decisions. Whatever your motivation, Revionics can help you analyze competitive and market data to determine the best strategy moving forward. Learn more about how to build a strong competitive pricing strategy with Competitive Insights.