Leveraging competitor intelligence to successfully improve your price, promotion, assortment, and content decision making is critical to success for most retailers. Unfortunately, often the data is incomplete, inaccurate, inconsistent, or not used effectively throughout the right channels within a retail organization to achieve market position while maximizing revenues.
Read on to learn how to get the most from your competitor price monitoring solution by having the best data and ensuring it is applied effectively to improve your market position and pricing.
1. Get Accurate Data
This seems obvious, so why include it? Unfortunately, data provided is often not matched correctly and consistently and so is inaccurate. However, the more accurate the data, the more expensive the solution, so it is important to balance the level of which you need accurate data with the amount of your budget.
The inexpensive way for competitor price monitoring is to have a software program crawl designated websites searching for predetermined product data matching on model numbers and/or titles. While this works for some items, it is almost always ineffective because most companies rename products and provide new numbers that match their internal system.
A proper product competitor price monitoring solution uses a mapping approach to reliably match products.
Before selecting a competitor price monitoring solution, ensure the accuracy of the data is guaranteed.
2. Know What Products you Want Compared
Products can be compared in any of the following ways:
- like to like (that is, comparing identical products to each other)
- like to similar (that is comparing a product to a similar competing product)
- private label (comparing similar private label items)
- groupings (that is, comparing identical or similar items that are grouped together differently by competitors)
Consumers are not always comparing identical items when shopping for something they want. For example, they might know they want a camera and the specs they prefer, but not necessarily the make and model. In this case, mapping identical items is not thorough; you need to know the pricing of all your similar competitive products.
To do this requires like-to-similar mapping, not just like-to-like. By using a trained analyst you can set up parameters to receive comparison reports that includes similar products.
3. Know the Initial and Ongoing Change Timelines
When deciding on a competitor price monitoring solution, check the timelines. How long will the initial set up be? How long will it take when you add SKUs later on? While having a fast initial setup might be a luxury you are willing to forego, will you be so patient when you have seasonal changes for hundreds or thousands of SKUs and need to wait weeks for the setup to be complete and the data to start coming in? Over the long-term, can you afford delays or do you need the SKUs mapped and ready to go within days, not weeks?
Ensure your solution can quickly and accurately map large numbers of SKUs.
4. Flexible Data Collection for Regular and Peak Seasons
How often will you need updated competitor pricing information? Start by deciding how often you will have the time and resources to review your data. Then, consider the frequency you will need updates during peak seasons. For example, while weekly updates during most of the year might be adequate, many retailers find it critical to have daily or on-demand updates during peak selling seasons.
Ensure that your competitor price monitoring solution can provide updates when you want them, with increased frequency during critical selling seasons.
5. Integration With Your System
Before making a decision on which solution to use, ensure that it will seamlessly integrate with any other relevant software you have. Whether you are using an out of the box pricing software or a custom in-house solution, your competitor price monitor should feed it data directly.
6. Develop a Plan to Use the Data
Getting good competitor price reports is costly but can have a huge financial reward if it is used properly. Companies that have successfully monitored competitors’ prices create a plan for various departments to use the data and set expectations for how the data should be used. Read Competitive Price Tracking for Large Retailer to learn how one Top Online Retailer uses the PriceTrac competitor price monitoring solution to grow their market share and revenue over time.
After creating a plan and training employees on how to effectively use a new price monitoring solution, monitor their actual tool usage. Great plans are wasted if not enacted by the end users.
Ensure that the competitor price motioning solution you use has the ability to quickly provide Employee Usage Reports.
When choosing a competitor price monitoring solution, know your current needs and consider your possible future needs. Ensure that the solution you choose is not a simple web crawler, but will provide you with accurate data, comprehensive reports, and flexible features to propel your business forward.