To maintain profits in an increasingly competitive market, retailers need a competitor price monitor, to efficiently identify the price point that drives sales and protects margins. The pressure is on as consumers research online for the best prices, and use mobile devices while shopping or “show rooming” in stores. Prices are being driven downwards, resulting in lower margins. To gain market share without sacrificing profit, it is critical to have accurate information to price products high enough to maximize revenue and low enough to close sales.
Competitor price monitors, such as PriceTracTM, allow you to accurately and consistently monitor competitors’ pricing, assortments, and promotions. Below are some ways that competitor intelligence can be used to improve your profits through pricing.
1. Strategic Planning Before Buying
An accurate and thorough competitor price monitor can give you the information needed to make strategic assortment and purchasing decisions for upcoming seasons. You can adjust your planning and assortments based on historical competitive information. Using the trending information you can see what your competitors’ did last season and forecast their upcoming strategy. That data allows you to optimize your own assortment and pricing decisions against theirs to distinguish yourself in the market and find niches to maximize profit.
2. Competitor MAP Adherence
A simple way to ease the pressure off of low prices is to monitor your competitors’ to ensure they are adhering to the Minimum Advertised Price (MAP). The PriceTrac competitor price monitor provides retailers with an efficient method of reviewing competitors’ prices to check if they are adhering to MAP. If they are not, you have the information available to quickly report the violation to the manufacturer. By pressuring competitors (through manufacturers) to raise their prices to at least the MAP, it eases your need to reduce prices downward, helps you remain competitive, and allows you to make more sales while protecting margins.
3. Competitors’ Price with Shipping Costs and Taxes
Whether you are a store-based or online retailer, a substantial part of your competition will be online retailers. Online retailers usually have shipping costs to add to their price, but often have lower taxes to bring the price down. When setting your price use a tool, such as PriceTrac, that can factor in your competitors’ prices with and without shipping costs as well as relevant tax amounts. This final price will provide you with the true competitive pricing picture.
4. Price Adjustments
Use a competitor price monitoring tool that not only provides reliable pricing information, but is available to your pricing team at all times, giving them the information they need to quickly make pricing adjustments. A competitor price monitoring solution should be part of the merchandisers’ regular tools that they use daily to quickly and easily compare prices by assortment and item. This information can be used to quickly adjust prices to reflect today’s market conditions.
Being able to strategically adjust prices up or down to reflect competitors’ prices is critical year round, but especially so in important holiday seasons. For critical selling times it is often necessary to check prices daily on important items. This can be efficiently done using PriceTrac, which allows not only increased price update frequencies, but also provides product price updates at the touch of a button.
5. Price Alerts to Increase Pricing
Identifying critical or sensitive products and setting up price alerts allows retailers to react quickly to market changes. PriceTrac allows you to set up alerts on high priority items and be notified when changes occur. A great example of how to use this to optimize prices would be a situation where you have lowered prices for competitive reasons. You can set an alert to be notified when your competitor raises prices and then immediately raise your price also.
6. Assortment Discounts and Promotions
Many of your items will eventually be priced as discount or promotion. Competitor price monitoring helps you optimize the time to do this. Discounting too early or deeply loses margins, discounting too late or light leaves you with out of season stock. PriceTrac helps you see prices at an individual and assortment level to help you make those decisions. For example, a retailer may have a large stock of back to school backpacks and wants to know when to discount and when to put them on clearance. PriceTrac provides item by item comparison and trending, and category pricing and trending. With this information it is easy to see when competitors are reducing the entire category and by how much or when certain backpacks are being reduced and by how much. Using this information you can make the best pricing and promotion decisions.
Finding the right price to stay competitive while protecting margins requires research and flexibility. Using a reliable competitor price monitoring solution makes pricing correctly easier. A competitor price monitor, such as PriceTrac, can provide you with a wide variety of information that can help you price right, adjust pricing, and keep an eye on competitors’ MAP compliance.