In part 1 of our 6 smart competitive pricing tactics, we shared 3 ways to price your products competitively: keep your eyes on costs, never undervalue your products, and compete for pricing at the brand or category level. Today we’ll share the next three competitive pricing tactics.
4 - Analyze your competitor’s historical pricing trends to detect sales like weekend discounts or nighttime flash sales
(**Here’s 1-3 of this article.)
Shopping occurs mainly in the present tense--it’s a matter of “now”. However, the same is not true of pricing. Most companies have time-based pricing strategies or discounting strategies. Some of them have public campaigns for their weekend sales, and some of them built a loyal shopper base for their late-night discount frenzy.
Gaining insight into such trends and acting competitively on them is as vital as being competitive at the product level.
This is because these trends or campaigns go beyond offering a simple discount; they are about building a loyal customer base.
Therefore, eCommerce companies should also monitor and analyze the historical pricing trends of their competitors while closely tracking actual prices.
5 - Focus on your competitors’ out-of-stock products
Prices matter, but only as long as a company can deliver the product.
Online shoppers consider product availability and prices at the same time. If a product isn’t available, the shopper is likely to make the purchase elsewhere. It works similar to how an expensive product works in the minds of an online shopper. It fails to grab the attention of the shopper and forces it to find another option.
This represents an opportunity for eCommerce companies. You can consider the stock availabilities of your competitors as a solid pricing opportunity.
When the competition is out of stock for a tight-margin product it means that shoppers do not have many choices, so their willingness to pay more will be higher. Therefore, the eCommerce company with competitive advantage and stock availability gets the potential advantage in pricing. With the right technology, companies can gain insights on their competitors’ stock availabilities and prices, then implement this strategy, on the spot.
6 - Negotiate better deals with suppliers with data
Data is a solid weapon when it comes to business negotiations. It’s a very objective way of presenting an argument.
No one can dispute data and suppliers to eCommerce companies are no exception.
It’s common to see eCommerce companies complain to their suppliers about the prices they see over at their competitors for certain products that they also carry in their assortments. Just mentioning this to your supplier won’t get you very far. But when this negotiation is handled in a structured format with clear data demonstrating a supplier-affected disadvantage for that eCommerce company, things may flow in a different direction. Providing hard evidence can bring further discounts or deals.
In short, you can act smart and show that you know what’s really going on between your suppliers and competitors, and confidently demand the best deal for yourself.
Competitive pricing intelligence is a multi-dimensional analysis should not be regarded as only monitoring product prices vs. competitors.
Even though such monitoring offers significant sales and a profit boost, that should not be considered enough. Going further by implementing the pricing strategies mentioned above can help eCommerce companies of all sizes further outsmart their competitors in today’s wildly competitive eCommerce market.
About the Author
Burc Tanir is an SMB-loving, eCommerce evangelist and the CEO of Prisync.com, the competitor price tracking software, already serving companies from more than 40 countries.