Pricing Intelligence in eCommerce
70% of shoppers admit that the price of the product influences their buying decisions across categories. Another study says a prospective buyer will visit 3 or more sites to be assured of the pricing competencies before making the buying decision. Trigger happy customers are also price-sensitive customers. If 60% of the decision-making process is purely a price-play, brands should take this into cognizance and start treading this landscape meticulously.
Determining the right product price is vital for ecommerce brands, as consumers' buying behavior alters significantly through it. Most consumers compare similar products on the same or different ecommerce stores before making the final buying decision. Their decisions are influenced by promotions, offers, referrals, preferred retailers, etc.
Some consumers might even try to reach out to a brick-and-mortar store and compare the price with online stores for buying products at the lowest price.
Pricing intelligence is a technique retailers use to stay ahead of the competition. It helps brands monitor and analyzes factors like consumer behavior, price trends, and response to price changes. These factors enable brands to develop pricing strategies, boost sales, grow market share and consumer base, and increase revenue.
Because of the dynamic nature of ecommerce as a business, pricing intelligence becomes one of the vital tools to combat competition and increase revenues.
Research reveals that Amazon changes product prices almost every 3rd minute on an average to better sales.
4 Important KPIs for Developing Pricing Intelligence
● Gauging Average Price Vs. Competition
The overall average price determines the estimated SKU price of a brand compared to its competition. In other words, it helps to understand the "price market share" of a brand versus its competitors. Additionally, brands get an idea of the top "price performers" based on the total sold units.
The Average Selling Price (ASP) is a good place for brands to start their price benchmarking and take a clear stand on their pricing strategies. Pricing higher than the category ASP can classify a brand as premium, and pricing lower can make it a mass category. These decisions impact the marketing and advertising strategies and decide the brand's future.
mFilterIt's e-commerce Competitive Analysis determines ASPs across pin codes, locations, platforms, sub-categories, SKU-wise, sub-brand-wise, and variant. Using this information, brands can increase/decrease the production of a variant, alter investments in the marketing budget, or increase/decrease distribution in a specific region.
● Average Price Per SKU Unit
The average price per SKU is the price per unit (gm/ ml etc.) for a product vs. its competitors in the same category. A brand needs to look closely at this data and correlate it to its performance.
The average price per SKU unit helps to understand the market dynamics. It gives a brand a fair idea about how their different SKUs perform on the pricing aspect and helps them understand the customer's point of view and how price sensitive the market is.
Accordingly, they can decide the type of pricing that works in the market and understand pricing trends.
● Average Price – Platform Wise
The estimated price of a brand's product on different eCommerce stores is called platform-wise average price.
Reviewing the ASP across eCommerce stores helps brands find the best platform for boosting their marketing investments and acquiring higher revenue. Moreover, brands can keep a check on competitor prices accordingly and monitor unauthorized reseller prices.
mFilterIt's eCommerce Competitive Analytics helps analyze the ASPs across platforms and allows a brand to maintain its competitive stand in the overall market.
● Average Price by Variant
Price by variant allows the brand to monitor the price of a particular product variant across different platforms and understand performance. They can compare their variants pricing vs. the competition's variant and monitor their performance.
mFilterIt eCommerce Competitive Analytics also divides it into brands, sub-brands, sub-categories, and variants. The prices can offer an in-depth review of the highest and lowest-performing products across platforms.
Moreover, brands can compare the average price of similar variants and draw insights into their pricing strategies. Similarly, brands can acquire a price-based performance overview for their sub-brand categories.
eCommerce pricing intelligence is no longer an option for online retailers. Pricing delves deep into a consumer's mind and helps a business understand and survive the crowded landscape.
A business's survival has a lot to depend on the value their customer derives from their brand, the incredible market forces, and the competition that follows it.
Pricing as a component is a complex piece of a puzzle. There are no straight answers anywhere. Experience and continuous experimentation are required to deliver the correct consumer value. mScanIt helps brands to dive deeper into the journey by providing results based on real-time data.
Brands using the mScanIt pricing tool are no longer required to conduct secondary research for determining pricing trends. Moreover, brands get a single-page price-based overview that helps optimize product pricing across platforms, categories, sub-categories, and variants.