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13 Jun
Thought Leaders - Does Price Monitoring Influence Consumer Brandview or Make Them Wiser?
 
 
Intelligent online retailers consistently apply and manage a few key business principles very well within their retail business therefore maximising every opportunity to gain and sustain competitive advantage. One of these is the effectiveness of how they track and monitor their competitors and overall competitive landscape. Taking this a step further, how they monitor a key driver of consumer sales which is driven by price.

Every business is different and undoubtedly have their own unique strategies aimed at dominating their online retail marketplace, securing competitive advantage to increase sales and maximise margins. To achieve this, some retailers offer a uniquely personalised shopping experience, others offer value-based pricing, many try to capitalise on value-based pricing while some look to capitalise on customer perceived value. This being said, the goals are very clear – develop and maintain strong competitive advantage(s).

Price monitoring is one of the most popular strategies adopted by smart retailers. Unsurprisingly, online retail giant Amazon was famously among the very first to take advantage of price monitoring as an effective strategy to gain competitive advantage. Their strategy has been so successful over the years across all their operational markets that they have enjoyed a reputation for offering the lowest prices available - even when that's not entirely accurate.

A 2015 analysis by Boomerang Commerce (founded by former Amazon employee Guru Hariharan), highlighted that Amazon primarily undercuts competitors on the most popular items during a given period, and at the same time increases prices on less popular supplementary items that consumers are already committed to purchasing alongside their primary item.

As retailers become more established and savvy, they are able to make better use of competitor pricing data as a direct strategy to see when and how their competitors change prices with access to AI and algorithm driven solutions that empower them to react to these changes in a timely manner. With all the strategic planning activity and investment in ecommerce price tracking solutions, the question remains – do retailers have more to gain from implementing and automated price monitoring strategy.

Here are some industry opinions on the subject from RetailWire –

Cheryl Sullivan - Chief Marketing & Strategy Officer - REVIONICS

“The bots and their algorithms merely match products and collect the competitive price data. It is what retailers do with the data that is crucial. If you are merely using it to employ price-matching policies and igniting price wars or raising your price because the competition did, then no one will win.

However, those retailers who are leveraging the competitive data along with the most advanced AI/Machine Learning price optimization technology can and do use it responsibly to create a win/win scenario -- giving shoppers the prices they view as fair and that they are willing to pay while also achieving the retailers' strategic and financial objectives.

Price optimization is not a new concept and that science can and does put the shopper first. It understands the shopper's price sensitivity levels for products to set the optimal price. It won’t violate trust and raise the price just because the competition did nor will it automatically lower when any competitor drops its price. In fact, it’s smart enough to understand how competitors impact their shopper demand and who truly is a threat and who is merely noise in the market.

Anand Raman - Vice President Business Development, Mobee

“I believe that price bots, AI and Machine Learning-based advancements in the world of commerce are part of natural evolution of the ecommerce technology stack. They are here to stay and they will play a significant part in (re)shaping the commerce landscape for all the parties involved in it — retailers, brands & consumers.

First came price parity between online and in-store, next came price matching guarantees, and now pricing based on competitive data. Thanks to price bots, consumers now expect price parity across various retailers.

Dynamic pricing is a whole another topic. If you are using competitive pricing data as a major (in some cases ONLY) input to dynamic pricing and not think about the in-market consumers, then I agree dynamic pricing is the race to the bottom. I think this is where there is a huge potential for retailers and brands to differentiate themselves.

We all know that “not all consumers are created equal” so they should not be treated equal. Retailers and brands should fully embrace what the technology has to offer now (multi-dimensional clustering and segmenting of the consumers in real-time) and understand your customer before recommending dynamic pricing. It is important to understand that customers are willing to pay more (or less) provider you can meet their needs and expectations. This means dynamic pricing should include tiered value-added services like expedited delivery (Uber, Instacart, etc.) and others in it.”

 

Art Suriano - Chief Executive Officer, The TSi Company

“I know that technology is moving at a rapid rate and it’s impossible to slow it down or even attempt to control it. There will continue to be many new concepts and technological advances and bots may have a place for many shoppers. The risks are there as with any technology but sometimes the phrase “less is more” holds true.

Today there just might be too much emphasis on the lowest price, the fastest delivery and the best rewards. At times it’s becoming a contest. Retailers are struggling with slumping sales and no growth. What I see as the game-changer is the one area that most businesses have lost sight of and that is providing “excellent” customer service. I say this because so many companies invest in the newest technology, must have this and must have that.

Walk into their stores and there’s no one to greet or assist you. So bots, are they a good idea? Maybe. But will it make customers jump and buy from you? Or will having a competitive price, adequate delivery and a great in-store or online customer experience be the reason the customer shops your store?”

Question …..

Consider all the retailers who sell the same or similar products online. Wouldn’t you like to know every price change they make? When they publish new promotional offers? Or even when they’re running low on stock in any product category?

Don’t get left in the dark, tell us who your competitors are and we will show you these changes and more as they happen in real-time.

This is what we do exceptionally well.

 

Read original comments on RetailWire here.

 

Thought Leaders - Does Price Monitoring Influence Consumer Brandview or Make Them Wiser?

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