November 14, 2023
Price monitoring has continued gaining popularity as businesses eliminate ineffective pricing methods. Pricing can be tricky for businesses. If not set strategically, it can lead to overcharging or undercharging. This error can cause a company to lose high-value customers or lose millions of dollars in unprofitable margins. Businesses often follow several strategies to set prices for products and services.
Pricing competitively is imperative to survival in the modern retail space. 70% of customers consider competitive pricing the most important reason for shopping with a certain retailer.
For retailers to set accurate and competitive prices, they must stay aware of market prices. Retailers can get pricing information through product price monitoring. In this blog post, we'll walk you through the meaning of price monitoring and its benefits. We'll also examine effective measures to monitor prices.
What is Price Monitoring?
Price monitoring is the repetitive tracking of a competitor's product or service prices to identify an optimal price for a given set of products. Competitor price monitoring helps retailers to take advantage of fluctuating prices, set competitive prices, gain more customers, and increase sales. The process requires retailers to conduct a comprehensive competitive pricing analysis of the different prices of similar products or services. Analyzing these prices help business owners to stay within a specific pricing limit.
Benefits of Monitoring Competitor Prices
Retail price monitoring attracts several benefits to businesses. We will explore four of them below;
1. Staying Competitive
As retailers monitor prices, they observe what to take advantage of for their business's growth. Upon analyzing different retailers’ prices, a retailer can lower their prices to gain a competitive advantage over similar businesses or raise their prices to make their products look higher-value.
A retailer can also set up sales promotions to gain more customers and increase sales. Customers who participate in this promotion can save money and remain repeat buyers. Furthermore, price monitoring aids the differentiation of your brand from others in the market.
2. Improved Financial Performance
Competitive price monitoring can boost the financial health of your business. As you monitor prices, the dynamic pricing strategy can show you the chances to increase or reduce your prices. It guides you on properly lowering or raising your prices to drive the influx of sales.
For instance, if you realize your competitor has limited or no product stock, you can increase your prices. As customers patronize you, there'll be more sales than you'd have made had your competitor had a full inventory of that product.
Likewise, taking advantage of rush hours is another opportunity to make sales that'll positively impact your finances. The increased demand here can influence your pricing decision, improving your finances.
3. Monitoring Supply Chain Efficiency
Reduced prices can facilitate increased demand. There could be chaos if there are no prior preparations for supplying these customer demands. Keeping an eye on competitors' prices and looking out for advantageous opportunities helps you to make provisions to satisfy customers' expectations.
Also, as a retailer, it helps you provide quality products to your target audience fast. Moreover, it helps your business improve its supply chain visibility, build a great rapport with suppliers, and automate supply chain processes.
4. Enhanced Customer Relationships
Using automated price tracking software helps your business build quality relationships with customers. Price tracking shows what your customers think about your brand, and leveraging that information enables you to serve them better.
Offering competitive prices to customers facilitates continuous patronage. It will also encourage your customers to stay committed to your brand and recommend it to others.
How to Monitor Competitor Prices Effectively
Competitor price monitoring can be done in two ways; manually or with the aid of price monitoring tools. Manual monitoring requires visiting physical stores, e-commerce stores, and websites to gather competitors' prices. After collecting these data, businesses have to manually populate spreadsheets with this data. This process is strenuous, ineffective, and accommodates many errors.
On the other hand, automating this process with price monitoring software fosters seamless and accurate monitoring. Before automating, here are a few steps to take:1. Determine what to track: Deciding your goal for monitoring prices will guide you on the data to track. Also, you must know how to use the data you track. As you do this, your company can decide whether it wants to receive notifications regularly when there are changes in market prices. When these notifications come in, your business can adjust its prices to serve its customers better.
Moreover, as you track certain data, you can decide to receive information about market trends at specific periods, helping you make effective pricing decisions. These periods include elections, economic recession, inflation, or economic boom.2. Know your major competitors: You can't track all existing competitors as a business. That would be too generic and stressful. Instead, conduct competitor pricing analysis on known major competitors.
3. Choose a price monitoring software: An ecommerce price monitoring tool helps you automatically track your competitors' prices. It automates data collection, eliminates data errors, and secures data generated.
The competitor price monitoring software conducts product scraping, analyzes product data, makes key pricing recommendations, and gives meaningful feedback in an understandable format. The analyzed data helps you to identify pricing and sales opportunities and increase profit.
There are options for off-the-shelf price monitoring tools, or you can choose customizable price monitoring software from EnterBridge to take into account every aspect of your unique pricing strategy.
Get Competitor Pricing and Set Your Business Apart
Monitoring prices manually is rigorous and inaccurate. However, using optimized pricing software guides you on how to compare competitors' pricing, differentiates your business in the market, and sets an optimal price for your product.
EnterBridge price guidance analyzes pricing data to provide product pricing recommendations, identify new opportunities, and improve business performance. Schedule a discovery call today to get a free sample pricing data set and start beating out your competitors today.