This is a guest post written by Burç Tanır from Prisync for Shopio eCommerce Blog.
Any company of any size can not escape from the harsh competitiveness of the e-commerce market. Taking emerging e-commerce markets into account, and the current growth traction of the market along with the massive investment rounds for e-commerce startups from all around the world, things don’t seem to slow down and the competition gets even fiercer.
The nearly mainstream acceptance of price comparison engines worldwide, today enables online shoppers to browse through the best deals of any product across the web. In such a landscape, e-commerce companies’ job is even harder in terms of acquiring the shoppers’ attention and fulfilling their demands.
Pricing as a vital factorIn today’s online shopping market, consumers are faced with tons of options to choose from. And also, all these options are just a click away, making all of them extremely accessible. Reaching the best deal requires only a few clicks for the shoppers.
Given such a consumer behavior, companies try to react by implementing various marketing campaigns with widely common catchphrases like ‘lowest price guarantee’ or ‘best deals’ etc.
As things are purely digital in e-commerce web-front, the sky is the limit for the dynamism of prices. Online prices are almost constantly changing and this makes it extremely hard for e-commerce companies to fulfill their marketing offerings like ‘lowest price guarantees’. Pricing itself is already a science and trying to add dynamic competitiveness inside this science makes things even harder and complicated. Achieving the best deals in the market, through manual tracking is completely impossible, because almost right after such manual analysis have been conducted, the prices might have been changed already. – a not so funny case of Heisenberg, in a way.
Some companies take this as a resource problem and muscle up their manual competitor tracking efforts by hiring more people, or building up crowded teams of interns, whose sole job within the company turns out to be manually scanning all competitor websites with a limited frequency and reporting that data, which would require further look to be turned into smart actions.
The smart approach relies on business intelligence tools that offer automation for competitor price tracking operations. Packaged as SaaS tools, these tools can be utilized through pay-as-you-go plans for affordable monthly fees, with well-proven ROIs.
The beauty of using the tool relies on eliminating the waste of manpower that would otherwise be allocated in manual monitoring. By implementing the usage of a tool, can let the companies reallocate their resources into more strategic activities like marketing and sales. By doing this, the company can muscle up and move forward vs. competition in various fields.
Steps to be taken before getting automatedJust like most of the other widely used business intelligence tools, before getting started with automation, there will need for a few manual inputs to get most out of such automated tools, in terms of insights. Let’s regard this as a guidance from the user. Here, basically the competitor price tracking tools would require the two following inputs:
- Competitor info
- The product portfolio that will be analysed within the tool, i.e. the list of the SKUs.
Such guidance is mission critical, as it will ultimately define the maximum gain, the tool can provide. Oftentimes, e-commerce companies know their major competitors, empirically. However, even with such knowledge, keeping track of price and stock availability data on all those competitors is an hassle, or maybe let’s say, an impossibility. A one-time monitoring, a kind of a snapshot can be gained through a quick Google’ing for a few SKUs, but scaling this effort for frequent analysis and larger numbers of SKUs is out of question.
Setting a prioritization within the list of competitorsA company can segment and then prioritize its competitors by their web traffics and their revenues – which can be roughly estimated through the web traffic figure estimates.
To have an idea about the web traffic estimates of e-commerce sites, companies can utilize tools/platforms like Alexa or SimilarWeb, which gives results both in terms of global traffic rankings, and monthly estimated traffic figures.
By listing down the competitors from top to bottom, e-commerce companies can see how well do their competitors perform, and how close they should be kept eye on.
A clean strategy here would be defining a threshold of website traffic, i.e. considering only the significant competitors. The list of the competitors to be monitored, then can be selected as the ones that fall above this threshold and then the second input stage can begin.
Picking the list of the products to be monitoredNumber of SKUs sold in a web-shop can vary depending on the market and the strategy of the company. It can be well above thousands, but oftentimes, not all of those SKUs require a close watch in terms of competitor pricing. Actually focus is crucial in this analysis, as it is in many other fields. In case a company decide to have all their SKUs to be taken into analysis, the size of the resulting data might cause lack of actionability, which is the main reason why a company would implement such a competitive intelligence project.
Therefore, it’d be wise to select a batch of SKUs that would go into monitoring. Here the choice should depend on the price-competitiveness of the products, or in more economics terms, the price-elasticity of SKUs. Picking the most price-sensitive products within a web-shop’s portfolio to benchmark vs. competition would yield the best return.
Another smart approach for focusing on a certain batch of products is applying the Pareto rule of 80-20. E-commerce companies can easily define their top selling SKUs and pick the batch which brings in the majority of the revenue.
As the two lists are readily available, the next step would be to put together the product page URLs from the competitors only for once and then feed this list of URLs into the system. Later on, the system will be up and running for the given data, and it will start tracking the price and stock availability information for all those products across the given competitor links.
The automation beginsThe following steps run simply fully automated. With a pre-defined frequency set by the vendor, the price and stock availability information across the market will get updated automatically. Therefore, it will eliminate the need for checking back what the competition is doing, once and for all. This time-saving will result in immense boost in actionability and will let the company to focus on more important tasks such as analyzing the overall data yielded by the tool.
For the most actionable results, e-commerce companies should look after solutions that provide:
- As frequent updates as possible
- Global coverage, i.e. no country/currency limitations
- Actionable alerts and various reports
- C-level reporting, i.e. big-picture reports
- API for further integrations
Update frequency is vital given the price dynamism within the global e-commerce market. Nearly %2 of the SKUs change prices within a day, so, a tool should be able to offer multiple updates per day to catch up with the market.Some price tracking tools have a defined coverage domain, i.e. they only monitor competition within Amazon or Google Shopping etc. However, the competition is not limited to a certain domain for any web shop out there, so such limitations surely limit the effectivity of the competitor price tracking. The selected tool should be able to cover any market vertical in any country for best results to be gained.
Being able to generate reports out of the raw data within the tool is also critical, given that companies may want to focus on the mission-critical details within the tool. Price change or stock availability change alerts are very important to make things easier and quicker for e-commerce companies. Additionally, being able to have analysis at brand and category level – beyond only seeing the pricing performance at SKU level – ,would enable role-sharing in category/brands teams inside an e-commerce company.
As for all sorts of business intelligence tools, a competitor price tracking software should also cater the needs of C-level executives within an e-commerce company. Its reporting should be taken as KPIs, that would be defining the competitiveness of a company in its landscape. Having historical data in within the dashboard is also crucial in case a company may want to understand the correlation of its past performance and its price competitiveness.
Today’s businesses are getting more and more connected and integrated. The data provided by a competitor price tracking solution would mean a lot more when it can be easily embedded into another tool or into the e-commerce company’s main reporting framework. In order to implement these integrations seamlessly, an API is a must-have when considering a competitor price tracking software.
Final wordsThere is no further need to emphasize the need for a competitor price tracking software in a price-competitive market like e-commerce market. Potential benefits of such automation are immense. Even today, there are tons of companies who still rely on manual efforts to gain competitive intelligence, where such methods prove themselves to be non-scalable and ineffective after a certain point.
With an automated solution, any size of e-commerce company, even small startups, can start tracking competitor prices for very affordable monthly fees. Competitive intelligence, thanks to such automated tools, is no longer an expensive skill or ability, but a must for an e-commerce company active in any market vertical in any country.
Hopefully, with this guide, you now already gained the roadmap to be followed to get most out of a competitor price tracking software.
As e-commerce requires more action than words, and fortunately it’s super easy to get started with a competitor price tracking solution thanks to free trials offered, and you are now cordially invited to this exciting world of smart pricing.