Price Optimization in Retail: Key Factors to Consider

Retail price optimization is becoming an essential tool for achieving success in the e-commerce industry. Retailers are finally realizing that it is the chief driver of profits. So why is price optimization in retail that important? Let’s understand it with a few examples.

Recently, an article published on Bloomberg has shown that bigger brands like Michael Kors and Ralph Lauren reported booming profits by managing their inventory better and offering fewer markdowns. It just confirms that ‘Price right, discount less and manage your inventory tight’ is the new formula for achieving the ‘magic price’ that would drive more customers to your online stores. That is price optimization in retail for you!

3 Important Factors that Affect Price Optimization in Retail

• Price Elasticity
• Product life cycle for different retail segments
• Seasonality

Keeping these in mind, the optimizers use smart price analysis solutions to harness user data from the internet, mainly review websites and social networks, and turn it into valuable inputs. These insights help retailers determine an optimal price for their products or services and the time when it should be introduced in the market to attain higher sales and better profits.

Bigger Brands have already adopted it: Have You?

Retailers follow different strategies to recapture the revenues that they have been leaving on the table earlier. For instance, Michael Kors and Ralph Lauren have made their products more exclusive by relying less on department-stores and closing storefronts to avoid aggressive markdowns.

JCPenney has balanced their inventory and minimized discounts to improve their pricing strategy. Meanwhile, Zara has incorporated other factors like planning, designing, merchandising and manufacturing in their pricing strategy to attain flexibility. This way, they were able to respond to their customers in a better manner.

Likewise, Kohl produced less fall and winter stock that helped their margin rates because fewer promos and discounts were required to sell off their old merchandise before the spring season.

How do you know what strategy is good for your brand? That’s where web scraping and price optimizing professionals help you. They determine an optimum price range that works for you. Therefore, you must avoid jumping on the price trend bandwagon and get professional help to overcome challenges.

PRICING ANALYSIS A Crucial Aspect of Business

Ecommerce is one of the most competitive market sectors, primarily because of the presence of hundreds of ecommerce websites. With so many options for fulfilling essentially a similar role, each ecommerce firm tries out strategies to convert as much customers as possible. These strategies may include attractive discounts or lucrative deals and offers. Some go with the option of pricing products extremely low, incurring losses in the latter or both cases. Such strategies are good for short term market gains but in no case can be sustained for very long.

The more established ecommerce players don’t go either way but instead formulate an entirely different solution called as competitive pricing analysis. This involves analyzing the pricing model employed by different competitors for the same product. Such analysis ensures that that the prices you mark for your product and services with not only allow you ample margin but also keep you competitively relevant in the market. Moreover pricing analysis also boosts your google shopping feed and thus attracts more traffic to your ecommerce portal.

As with other data intensive procedures, competitive pricing analysis too requires data collection, comparison and results which is impossible to be accomplished manually. Naturally, the process needs to be automated via a software algorithm that collects processes and outputs the pricing data automatically.

This is particularly crucial since the analysis isn’t a one-time operation but a periodic cycle that needs to be run regularly so as to not lag behind the competition. Moreover continuous pricing analysis will furnish with you with enough data to optimize your pricing to earn the most revenue on your sale. You can fine tune your analysis software by adding layers like shipping costs, MSRP, discounts given, the actual product price so as to extract the most out of every sale made on the website.

Meet Important Business Objectives with a Good Price Intelligence Strategy

Due to the dynamic marketplace, constant change in prices of the competitors, and easy online access to pricing information, it is becoming increasingly important for brands to keep up correct prices to make optimum profits. Retailers regularly monitor their competitors to ensure that they offer the best price in the market keeping many factors in mind. One of the quickest ways to ensure this happens is by hiring services of a company that can assist in competitive pricing intelligence for your products.

Some of the objectives that a retailer can accomplish with a good pricing strategy are mentioned below:

1.Growth in Sales – When the pricing is modified or altered to increase the sale, the sales volume will increase.

2.Increase in Profits - If their pricing is right, they can make more money either directly or indirectly. If the units sold are more, it means the pricing is influencing the profits indirectly. It also affects it directly in such a case, as the margin multiplied by a number of units sold increases the total profit.

3.Larger Market Share- The competitive pricing intelligence also assists in increasing the market share for the retailer in a market which was not penetrated by them as yet or the share was lesser.
4.Managing the Competitors – To be able to avoid competitors to enter your market area and take over your loyal customers, the pricing intelligence can assist in providing the right information at the right time to either lower or modify the price points such that it can benefit the business in the long run.

5.Better Customer Satisfaction- “Customer is the king”. Hence it is advisable to manage the pricing to benefit your customers. If they feel confident about your brand and its pricing, they will not only buy more but also refer more.

Here are a few tips to win over your competition with pricing

Whether you run a business of your own or are a start-up, you must sooner or later update yourself with the fact that pricing is finally the ultimate game breaker in any business. It is the price which finally affects the buyer’s decision if two similar products are offered by different stores. You may be having a broad range of brands and categories in your store and might be finding it hard to figure out an efficient way to create your pricing structure in comparison to your competitors.

We have listed below some key steps which you can follow to reach your goal of devising a pricing strategy that can win you, customers:

1. Find out the key products that fetch you the maximum revenue.

1. List out your key competitors which have similar product category as yours. 

1. Now, find out your prices for your important brands and categories with respect to competition.

1. Plan how you wish to see pricing for your brands and categories. 

1. Start daily tracking your pricing in comparison with the competition and evaluate the trends and patterns.

1. Match your pricing with the competition keeping your price margins.

1. Utilize price tracking as well as price automation technology to help you plan your pricing strategy without really having to do the hard work yourself.

1. It is important to automate as well as integrate your data from price intelligence tool with the stock control, content management, PPC or PLA systems.

1. Last but not the least, it is important to find a good pricing against the competition is not a one day job, but a consistent activity where the competitor prices are monitored regularly and an appropriate approach designed for effective price management. 

Here are a few reasons to look for a Web Content Extractor

To extract data from the different websites can be quite cumbersome if done manually. It not only takes hours to do this but can also be frustrating as it may involve copying and pasting certain texts and images and hence is not a very productive way to extract the data.

A good web content extractor service provider can assist in increasing the productivity as well as effectiveness in extracting the website content. It should be able to extract highly accurate data which is user-friendly and wizard-driven.

Extracting Different Types of Data

Some important tasks like social media extraction, yellow pages or business directory extraction, e-commerce extraction and real estate extraction can be done through various web content extractor services available.

Quick and Easy Data Extraction

It also has a powerful web crawler engine which can provide data fast and in an efficient manner. It can not only extract data quickly and effectively from password protected sites but also download from many different threads at the same time.

Export Data Easily in User-Friendly Formats

You can not only extract the data but also export it in different formats like XLSX, CSV, SQL, JSON, XML etc, which can be used to analyze the data or export it to any other application like the FTP or a database.

Flexible

Even though the program extracts data in a certain format, it is easily possible to make changes in the format or program’s choice if you wish.

Reliable

The data extracted from this tool can be trusted completely as it is completely verified, accurate and reliable.

Schedule Extraction

You can also use a series of command line options to schedule data extraction at certain intervals. You can easily automate this program as well.

Six Points to Consider before hiring a Web Scrapping Service Provider

Although web scrapping is one of the easiest ways to extract data for businesses like e-commerce, real estate and others, it can be quite challenging to find the right web scrapping service provider for your business. One of the other important reasons is to trust a third party with your valuable and confidential data. Hence, web scrapping comes with not only its sets of advantages but also risks. 

Let’s explore and find out what you should be looking for in a vendor who can provide web scrapping services.   

Reliability: It’s must to consider if the web crawling defaults due to any website updates has a proper monitoring system to manage it, else you may lose all your data. 

Flexibility: Choosing a service provider that can give you data in different delivery modes is good as you can easily analyze it well and it will be compatible with your analytics. 

Data Quality & Delivery: One of the main reasons you hire a web scraper is that you must receive clean data that is analytical. If the data is duplicate or in an irregular scheme, it can hamper your analyzed results.

Service Levels: Look for vendors that have a good support system for your issues as lack of resolution in time can reflect adversely on your business. Probably a dashboard where you can add projects and download data with a help desk would be advisable. 

Costs: Ensure that you have set aside an appropriate budget for this activity but also ensure that they provide you with a simple and predictable pricing model for a growing business.

Infrastructure: It is important that as your business expands, the service provider you hire has an appropriate technological support system to manage your data scrapping requirements.  

Five reasons why price intelligence has undisputable role in retail business

Price intelligence has already become a buzz word in retail business. A retail business unit works for achieving maximum benefits and aims to see remarkable growth in all aspects of their business. There is a constant struggle to attain it and in the process, they know they need to deal with several existing and impending challenges. As a retailer, the responsibility lies in managing the price tags and how effectively they can handle the pricing after analyzing the competitor price strategies. Such scenario actually drove the retail marketers to explore the capabilities of price intelligence software.

Knowing where your price strategy stands

The ultimate objective of ushering in a price intelligence technique to your business unit is not only for looking into other’s price strategies but to have a retrospective on your own stand in announcing a price strategy on the commodities you are dealing with. For this, if you think that a smart solution is required to find out where you stand in terms of building up a price strategy, then it is certainly a fair idea.

The competitor and their price strategy

As you know, this is one of the very common aspects of retail business. Knowing the price strategy of all the competitors in and out is too significant. From this sort of in depth analysis, you come to know what you need to do with your price intelligence and how you can make it a successful effort. Once you realize this, you do nothing but search for the most effective price intelligence solution you can acquire from the market place.

General market health analysis

When we say market analysis this is not just analyzing the price. It has a greater meaning which involves with the market trends. What is going on in the market, especially the up and downs. The market health has become so very important when you decide to enter into a competitive business. Here, your concern is not only the competitor’s conditions but the entire market scenario as a larger vision. In this scenario, a great price intelligence solution comes as handy and needless to say, that is something which no retailer can ignore.

Knowing the customer interest

This is another aspect to which you never can turn your back on. The customer taste and interests quickly changes. Now you might wonder what it has to do with price intelligence. The fact is that through your price intelligence mechanism you come to know what are the price ranges the customer is generally preferring to and at the same time what is the product quality they are expecting from. Once you have a great price intelligence solution, it allows to know these are very intriguing aspects of retail business. 

Rebuilding your own budget and finances

The insights you have achieved through our price intelligence mechanism surely help you to reconstruct your own budget, especially those you spend for marketing your business. When you come to know about the competitor price and business strategy along with the market trends and customer behavior, you are experienced enough to not only reestablish your price strategies but your business strategies as a whole.

Considering all these above points, one come to a conclusion that in today’s retail business price intelligence is not only the most crucial scale to measure the business growth but act as the most important lifeline to them!