Tips to Keep Your Ecommerce Business Competitive
Being a CIO professional in today’s business world has never been more pressure-filled. With technology changing daily, it can be challenging to stay abreast of every available product and service to keep your business operating at its maximum capacity. If your business is an online retail service, that pressure is even greater given the recent trend of hundreds, even thousands, of brick and mortar store and mall closings. The pressure is on to either take these businesses online or to better perform against online competitors. There’s no doubt that ecommerce is the future of retail, and with that being the case, there are several ways that CIO professions can better serve their retail companies by automating their site’s competitive pricing strategy.
As the market increases for online customers, it’s never been more important to understand how real-time pricing decisions can decide the fate of online retailers in what is becoming an increasingly crowded and aggressive landscape.
There used to be a time when all e-commerce retailers attracted buyers with “list prices” or “official prices” and would claim to slash discounts to get a sale. The end result was that it became impossible for the customer to accept non-discounted prices online.
There’s no doubt that ecommerce is the future of retail
Dynamic pricing allows online retailers to stay competitive and rake in more sales. Larger companies are aware of this and that’s why many of them have integrated their operations with fully-automated dynamic pricing solutions. But how do you know which software will work best for your business? The contribution of any pricing technology, plainly, has to be its ability to drive revenue, margins, and profits with better insights into pricing levels and shopper behavior in real-time at a granular level. Dynamic pricing should have the ability to adjust to changes in the market and consumer trends quickly, as well as focus on only products and competitors the retailer believes are relevant at the time.
Here’s a 5-point checklist your dynamic pricing software should offer without human intervention:
Peak pricing involves hiking prices in exchange for quick services during peak hours. An automated dynamic pricing mechanism must be able to identify the peak hours and accordingly impose the amplified charges. Online shoppers thrive on comparing prices. Keeping prices on par with the competition is of paramount importance. Real-time, constant pricing adjustment based on market factors has to be the solution to satisfying the bargain-hunting appetite of online shoppers–in the form of price optimization.
Pricing Based On Market Share
This method is also known as penetration pricing. Dynamic pricing software must be clever enough to discover a product that needs to be pushed to increase its demand. This happens by pricing the commodity well below the market level so that consumers see it as a bargain and demand more.
Pricing Based On Time
Standard pricing software should fix higher prices based on time. Usually, this is done by charging extra for faster services. Companies can also charge extra for an order that’s been placed after business hours.
Consumers might visit the same website for a purchase, but their activities are completely different. A pricing mechanism should be able to capture this behavior and devise individual pricing. For instance, a tech-savvy customer might pay more for a gadget that has more value to them.
Volatile markets, rise and fall in demand—these are the parameters that must determine the pricing. Dynamic pricing software should gauge these constraints and price a commodity accordingly. For instance, the price can be lowered to raise sales when demands are low and hiked when it gains ground.
With online shoppers continually seeking out bargains, real-time, continual pricing adjustment focused on market factors is the only sure-fire way online retailers can get shoppers to return. This is where price optimization software is required.
Pricing response time is the key. Automation enables online retailers to optimize pricing 24/7. The market changes quickly and to succeed online retailers need to be able to change pricing to keep up with it.
An intelligent competitor price monitoring algorithm ensures that you are always competitively priced but never underpriced. What's the point in offering discounts when all your competitors have run out of stock? Capitalize on the demand with pricing intelligence to optimize your revenue and stay competitive in a landscape that will only become more and more competitive.