It’s been some time since our last post, mainly due to becoming incredibly busy following our coverage in the media.  We have been working hard but we wanted to take a step back and give you some information on a popular topic - Price Comparison Engines (PCEs).

Is the Price Really Right? Price Comparison Engines Don’t Always Show The Bigger Picture

 

Unless you’ve been in hiding for the last few years you will have noticed the rise of Price Comparison Engines.  Such organisations have taken the world by storm, using catchy theme tunes and memorable characters in their advertisements to grab your attention.  Whether you prefer enthusiastic opera singers or meerkats, Price Comparison Engines are a great tool for consumers to source the best deals online.  From comparing car insurance prices to mobile phone tariffs, over six million people in the U.K use these sites every month and this is something online retailers cannot afford to ignore. 

 

 Times are hard and the majority of us are becoming increasingly more careful about what we spend.  This has no doubt helped PCEs to become incredibly successful as the price of a product is fast becoming the sole deciding factor behind whether it is purchased or not.  Websites such as Google Shopping, Nextag, PriceGrabber and Kelkoo are mercilessly price driven and they influence shoppers to be the same, which makes monitoring your competitors’ prices closely a critical aspect of any competitive pricing strategy. As a retailer, it is essential to get into the habit of comparing prices because that’s exactly what your customers are doing - they use a PCE and choose to buy the cheapest product, satisfied that they have received the best deal.  But is this actually the case? 

 

 

 

 

 

For consumers, PCE’s are most definitely the best tool as they are quick and easy to use, which means that within a matter of seconds they can see a range of prices for a product.  If a consumer were to price-check manually they could be on for hours!  First, having to research which retailers sell a particular product, then going directly to each retailer to make a note of the price. In a world where we are increasingly expecting things to be done in one click, this just isn’t practical.  Given the benefits PCEs pose to consumers and the sheer number of people using them, they may well be useful to retailers in terms of marketing.  But for retailers to use PCEs as a means of forming a pricing strategy could be seriously detrimental to their business.

 

PCE’s do not provide a comprehensive, or indeed accurate, overview of the market as a whole.  The prices you see appear on a PCE are generated from product data feeds which are often received only once per week.  Online traders will update any price changes on their website immediately but this change may not show on a PCE until a week later, by which time the price has the potential to have changed again.  This means that information posted on a PCE can be out-of-date, making it an unreliable resource in terms of gaining price intelligence.  As well as this, it is unlikely that they will provide information on all of your competitors because not all organisations use PCEs as a marketing tool. Thus gathering price information directly from each retailer’s website is the most accurate way of obtaining the best possible pricing intelligence and can often paint a very different picture to the one that is offered on price comparison sites.  

 

Only by using information gathered directly from your competitors’ websites can you monitor their prices in real time. This allows you to predict their ranking in price comparison search results and stay competitive by adjusting your prices accordingly. The only issue with this is, as already discussed, for the retailer to use an employee to manually check prices on a daily basis would be incredibly time consuming, not to mention tedious for the employee.  The most cost effective and time saving way to do this is via automated competitor monitoring software which generates daily reports on your competitors’ pricing and product activity. For example, our customers here at Competitor Monitor receive a daily report on both pricing and product data of competitors.  In fact, monitoring product activity is another area where PCE’s fall short as and they won’t tell you if your competitor introduces a new product whereas competitor-monitoring software is quick to alert its client of any changing product activity. 

 

So, how can using competitor monitoring software help you to succeed on PCE’s? The answer to that question is quite straightforward in that retailers who use the software in conjunction with tracking PCE results can achieve a competitive advantage by capitalising on outdated pricing. If, for example, you become aware that a competitor has changed a price on their site and you see that it hasn't yet been updated on their PCE feed, you can exploit that by changing your prices before them and updating your product data feed so it shows on a PCE immediately after you have changed it.

Such software can be used to take advantage of other situations as well.  For example, discovering that a competitor is out of stock of a specific product enables you to push up your own price and maximise profit margins.

 

PCEs are therefore a useful tool for the busy consumer who wants to make a quick purchase for a good price.  As they are incredibly popular with consumers, PCEs also have the ability to be useful to retailers as a form of marketing.  However in relation to using them as a foundation for forming a pricing strategy they are useless because the information can be out-of-date and limited.  Using competitor-monitoring software is by far the best way of gaining sound price intelligence.  Using this information in conjunction with changing your prices, monitoring your own products, and updating your product data feeds enables you to remain competitive in the world of Price Comparison Engines. 

 

If you have any questions on this topic or anything to do with monitoring competitors a member of our team would be happy to speak with you at sales@competitormonitor.com 

 

In our last blog post we gave you an introduction to the world of monitoring. This week we're going to focus on competitor price monitoring, which is a great way of maintaining a competitive advantage online.

Competitive analysis should be an ongoing practise of all ecommerce businesses operating in competitive markets. Now that online price monitoring is so simple to do, there is no reason not to include it.

'Competitive Jewellery' (not real!) launched only six months ago. They sell low-mid range priced branded jewellery through an ecommerce store. They operate in a very competitive market, and have come to realise that they are going to struggle to survive unless they have a way of capturing the customer's attention as soon as they come online. They are doing ongoing SEO, but stand little chance of making it to page 1 anytime soon.

So they decide to do some research and stumble across an up and coming trend in the world of ecommerce - competitor price monitoring. They see this is as something which can potentially give them a chance to compete with the well established players in the market becasue we all know the first thing people do when they go to buy something online is hunt around for the best prices. If they are able to continuosly offer the best prices, then people will return to them, and they will build their brand as a result.

So how exactly does competitor price monitoring help Competitive Jewellery stay competitive?

 

Optimal Pricing - it ensures they always have their prices set competitively. They never have to worry about pricing too high or underselling too much. Anytime their competitors are out of stock of a certain product, they can jump right onto this and capitalise, whereas in the past they would have probably realised too late.

 

Competitive Intelligence - once they start using online price monitoring, they soon notice interesting trends. Prices of certain product ranges will drop across the border for no apparent reason. In the past it would take them a while to realise this.

 

I f your current situation is nothing like the one in the example then this doesn't mean competitor monitoring is not for you. It can help businesses of all sizes and in all markets gain and maintain a competitive edge. If nothing else, the information is simply very interesting to know, and spotting trends will help you learn more about your competitors.

This is only really scratching the surface with what competitor price monitoring can do for businesses, so leave a comment if you want to talk to us about it. We're passionate about it because we know how much use it can be and we really see it becoming widespread. The problem right now is that no one really knows you can even do it.. although I guess in the eyes of those that currently use it they want it to stay that way!

Will this become common practise for ecommerce websites, and end up simply pushing profit margins down for businesses? Who knows. Maybe, but it will take some time. And the fact of the matter is, right now not many businesses do monitor competitors, so there's no better time to start than now.

 

 Do you know what your competitors did today? Business is fast paced and constantly changing. In order to stay effective and competitive in the marketplace, you have to know what is happening around you. Perhaps most importantly, you should know what your competitors are doing on a daily basis. What are they promoting? What prices are they selling at? How is their business advancing? Competitor monitoring is something that can keep you informed and in control. 

 

 

There are all types of competitor monitoring available, that let businesses monitor and analyse their competition in a variety of different ways. Price monitoring is just one aspect of competitor monitoring which can prove to be particularly effective in helping businesses stay competitive. For example, if you have an ecommerce website and your sales drop off all of a sudden for no obvious reason, competitor monitoring might have the answer. Your competitors might have lowered their prices significantly enough to draw customers away from you.

 

Alternatively, product development and diversity can also have an effect on how your business performs. In the same scenario where you suffer a drop in sales for no obvious reason. Competitor monitoring might reveal that a competitor has added a new range of products that give them an edge. 

 

With this knowledge, any business has the power to make more informed decisions and choices in where they should be taking their business and how they can develop to fit with market trends and advances.

 

 

Innovation and change are key to business. Without development and new ideas, businesses become stagnant and fail to successfully compete in the market. Competitor monitoring services aim to survey and analyse changes in the market. Within a single business, anything from a pricing structure change, a new product line, the removal of old products or new ways of marketing can have an affect on how other businesses in the same market perform.

 

Monitoring change in your closest competitors gives the opportunity to choose to take action, whether that be defensive action, or offensive action - change for the better, whatever that change may need to be. 

 

 

Competitor monitoring, while effective and empowering, should also be discreet. It is one business area that must be tactful in its own endeavours and seek to produce results without being detected. If your competitors are aware that you are monitoring them professionally, this could be counter-productive to the process. It is also important to state that competitor monitoring is not an underhand practice either. Information that is collected as part of competitor monitoring is openly available for all to see in the first place. A good competitor monitoring service will just ensure that this information is collated and communicated effectively.