Price monitoring and automated repricing – 5 advantages for online retailers
Without monitoring the prices of the competition and dynamically adapting your own prices to the constantly changing market conditions, your competitiveness is massively endangered. In this article, we show 5 decisive advantages of using tools for price monitoring and dynamic pricing.
Continuous price changes are an integral part of the pricing strategies of e-commerce today. It’s not uncommon for the price of a product to change daily – and in the case of some online merchants, it can even change several times a day, depending on factors such as the time of day.
According to a study by the German E-Commerce and Mail Order Association (bevh), 40 percent of online retailers in Germany already use dynamic pricing to enhance their competitiveness (2016). The Brandenburg consumer advice center (VZ) found even clearer results in its survey, which tracked 1,100 products from German online retailers. It was discovered that 15 out of the 16 online retailers covered by the survey regularly adjust prices for parts of their product range.
The price fluctuations resulting from these changes have caused quite a stir in the online commerce industry. Today’s customers are informed and compare the offers of different suppliers before they finally make their purchase decision. Within seconds, your price determines whether a user becomes a customer for you, or whether you lose him or her to the competition due to an unfavorable price. In order to stay ahead in the “battle for the customer”, continuous price tracking is essential. Tools for price monitoring and dynamic pricing tools such as the ones from XPLN are part of the standard equipment for doing this. Using such tools not only means you join many other online retailers in doing so, but also means you can actively shape the market with your own sophisticated price strategy.
This requires a comprehensive knowledge of the market, which is only achieved through reliable market data. Knowing the competition, and what prices and strategies they are pursuing, is the foundation of your company’s success. This is the only way you can make smart decisions on your pricing, because an “optimal” price is not always the cheapest! If you know the market situation and the prices of your competitors, you’re able to align your prices accordingly. You may even be offering some of your products too cheaply at the moment and could adjust your prices upwards due to good stock levels or the current market situation. With automatic re-pricing, you will no longer miss out on sales, and the profitability of your products will be optimized.
Price monitoring pays off – in multiple ways
1. Increase your turnover with price monitoring
If you know the current prices on the market, you can align your price strategy accordingly. Our MARGIN MAXIMIZER automatically determines an optimal sales price for your products based on your individually specified factors – and you win a sale on Amazon, rank well on Google Shopping, and automatically offer the best price in your own online store.
2. Don’t miss out on margins unnecessarily
Tools for price monitoring and automated repricing do not necessarily mean a downward revision of your own prices. Observing the prices of your competitors will also tell you whether you offer products below the current market price, or if the inventory situation of your competitors allows a significant price increase. By dynamically adjusting prices to those of your competitors, you not only increase sales and gain new customers, but also increase your margin and therefore your profit.
3. Strengthen your negotiating position in purchasing
Price monitoring systems provide you with a comprehensive market overview – you know the prices on the market. With this market knowledge, you can significantly increase your negotiating position with your suppliers. Knowledge is power. By gaining the insights that price monitoring tools offer, you can purchase inventory at lower prices.
4. Reduce your manual effort to a minimum
To be successful in e-commerce, you need continuous price monitoring and quick reactions. Smart tools take over the market monitoring on all channels for you and can adjust your prices on a channel- or customer-specific basis, or permanently. This can all be done automatically.
5. Automatic dynamic pricing
E-commerce lives on dynamic prices. Only the retailers who continuously monitor their competitors and the market situation can react quickly to current market conditions and benefit from price adjustments. XPLN offers you decisive advantages in online retail: with our cloud-based solution for automatic and dynamic price adjustment, you can offer your products at an individual, best price at any time. Decide for yourself which factors should be included in the price recommendation. Based on your specifications, the algorithm optimizes your turnover by calculating the price – and thus boosts your profit.
Fast-moving product lifecycles and dynamic pricing mean that in online trading, quick reactions are necessary. To be able to determine an optimal pricing strategy for you, fast information and an up-to-date analysis of your competitors are essential. Use the transparent prices in e-commerce to your advantage. With XPLN, you can keep a constant eye on your competitors and increase your sales through automated pricing.
Would you like to learn more about profit optimization through price monitoring and dynamic price differentiation? We would be happy to advise you on the development of your individual pricing strategy.