How Data helps Herman Miller outwit global rivals

To boost product visibility and sales with optimized prices, retailers and brands can use retail data analytics to access real-time insights into the global e-commerce landscape. Let’s look at how Michigan-based furniture manufacturer Herman Miller can use retail data analytics to gain a competitive advantage in the global retail market.
herman miller chair

This case study focuses on a specific product: the Herman Miller Mirra 2 chair. Retail data analytics can help Herman Miller pinpoint which retailers around the world offer products that exactly match this chair model, how their prices compare and what Herman Miller can do to remain responsive and competitive worldwide.

World map comparing herman miller chair

Retailers around the world selling exact matches of the Herman Miller Mirra 2 chair include Amazon.com (US), Amazon.co.uk (UK), Flipkart (India), Badbacks (Australia), Rakuten (Japan) and Taobao.com (China). These findings help Herman Miller know its global competitors – for this particular product – with greater certainty.

similar matches herman miller chair across competitors

The scope of competitors expands further when Herman Miller considers other furniture retailers selling similar matches (as opposed to exact matches) to the Herman Miller Mirra 2 chair, including Steelcase and Haworth, which are both US companies.

Data analytics help Herman Miller understand how the Mirra 2 chair compares to these competing products in terms of their attributes. The similar matches and the Herman Miller Mirra 2 have major differences in chair weight and height, and negligible differences in seat width and depth. Thanks to these findings, Herman Miller could emphasize that the Mirra 2 chair is almost 11 pounds lighter and 2 inches taller than the Steelcase similar item, and a whopping 20 pounds lighter and 2.5 inches shorter than the Haworth chair.

Knowing these global competitors with exact and similar matches can help Herman Miller see how its pricing strategy compares to rivals’. They can view product price fluctuations in local currencies, as well as a single currency (USD) for easy comparisons for the Herman Miller Mirra 2 chair.

 

Amazon strategy herman miller chair

 

In addition, Herman Miller can see that an increase in price over time led to a corresponding increase in product visibility on Amazon.com in the US market. This suggests Amazon may favor higher priced products and boost their online visibility, which impacts retailers’ and brands’ online pricing strategies.

 

By contrast, as Japanese retailer Rakuten’s price for the Herman Miller Mirra 2 chair generally declined over time, the product’s visibility increased on the e-commerce website. This suggests Rakuten may favor affordability, driving the chair’s popularity and online product visibility, which impacts retailers’ and brands’ online pricing strategy in Japan.

Another important online pricing consideration is discounting. A lack of international standards for retail reporting among international retailers’ offerings means Herman Miller would not have a clear picture of the amount of discount offered on the different e-commerce websites. To solve this challenge, Herman Miller can gain access to pricing tools to adapt competitors’ pricing movements. Setting custom pricing rules and generating smart prices – such as always selling for 10% less than Amazon – can help Herman Miller adjust its pricing in real time to remain competitive globally.

Bottom line: Data fuels market dominance

Overall, retail data analytics have evolved into essential resources to compete in global e-commerce. Data insights can help Herman Miller gain a deeper understanding of its competitors and retail pricing strategies around the world. These insights can help Herman Miller (and other retailers and brands) reduce risk by adjusting pricing in real time to gain a competitive edge, boost agility and remain attractive to online shoppers.

How Dynamic Pricing is Disrupting Online Retail in 2017

With the era of online shopping came the concept of dynamic pricing. This is a natural turn of events that might not be working as well as expected.

Dynamic pricing is a strategy based on which retailers change the price of the product based on supply and demand.

In order to do this, you need a large amount of information. This includes the initial conditions and the prices that competitors are charging. In addition to that, customer information is also a vital input. Customer price perception also plays an important role since that’s what determines the profit margin that you’re getting.

In the old days, static prices were the norm, since there wasn’t much to be done when it came to doing research on how much a competitor priced their products and how you had to compete. But that’s changed now. The old strategy didn’t help retailers make profits. But today, with dynamic pricing, you can find that the profitability has been optimized to everything, even simple products like medicine and sports goods.

It’s Always Been Around

The idea of dynamic pricing isn’t new to the retail industry. It’s been something that organizations have done for a long time. It’s a tactic used to grab the customer’s attention and so far, it’s proven to be extremely successful.

Here’s a few examples on how dynamic pricing has influenced different economies.

  • The concept of “Happy hours” in a bar worked in attracting customers when they weren’t expected at all. Of course, the prices on drinks were slashed, but this attracted a lot of customers, which increased the amount of business that the establishment did during that time. This increased their profits for that time. It proved to be so effective that most bars and pubs adopted it as well.
  • The stock market operates on the basis of share values rising and falling. Similar to the concept of dynamic pricing, the value of shares are calculated by considering initial conditions, demand, and a few other parameters. This includes the company’s actions and the state of the economy. So, the prices are adjusted to make the most of the current situation.
  • Take airline ticket prices, you can see that they operate along the same line. During the weekends and Fridays, you’ll see that prices are higher than on regular weekdays, since they know that more people are inclined to travel during those times.

It seems natural to make profits by controlling prices based on demand. However subtle, the same ideology has been followed across several business streams.

What’s Changed Now?

Dynamic pricing is only possible when you have all data on hand. Another important aspect is running the data using a custom algorithm that suits your particular business model. You’ll find quantifiable results only when you take all variables into account and bring out accurate pricing.

You might be wondering. If all this was thought of and implemented all along, what took online retailers so long?

Factors that made dynamic pricing possible are computers and new technologies that recently came into existence. The concept of collecting, storing, and analyzing data paved the way to bigger things, dynamic pricing being one of them.

Retailers Hesitation

The algorithms in place are fed with all the available data on hand. These are details that concern the product and customers. The resultant price will determine the profit or loss that is collected on the product.

A foolproof algorithm can give you accurate answers. However, not all retailers are using these results. You have to understand that changing prices like this is a huge risk to take as well, and that’s something not everyone is comfortable with. A slight drop or rise in the cost of the product will affect the economy and the possibility of success.

This algorithm is simply used by the retailers. Why they hesitate is because they don’t understand how it works. That’s the case even after competitor’s prices are taken into account. That’s why not every retailer takes dynamic pricing into account.

Amazon’s success

Amazon has had tremendous success in applying dynamic pricing to their products. Other retailers are still attempting to beat Amazon in this field. This is the single reason Amazon is doing better than their competition. They’ve managed to price their commodities lower than others.

Dynamic pricing, coupled with their good user interface and customer services, Amazon has managed to stand at the top. This was only possible with proper synchronization of e-commerce, omnichannel, and brick and mortar stores.

It takes Amazon two minutes to make a price change ! Is your price right?

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Implementation

Dynamic pricing is a five stage module. It needs to be gradual so you don’t lose money. These are stages where the price of the commodity is decided based on different factors.

  1. The first module is the long-tail module. It is the price that is determined at the launch of the product. It plays a crucial role in the success or the failure of the product. Essentially, the price is based on base price, price of similar commodities, and set profit margins. The success depends on the product itself and its reach, done through marketing.
  2. The second stage is where the price is increased or decreased based on demand. Both can affect profits negatively or positively. By reducing price, there may be ultimately more buyers. At the same time, if received well, consumers may be prepared to pay more for the same product.
  3. The third stage is key value identity module. This depends on the consumer’s price perception. This largely influences sales. Here, a product will sell from the retailer if the prices are below competitor’s prices. This is the stage where a customer is either gained or lost. The KVI and the price need to be on the mark.
  4. Competitive response module is the fourth stage. Here, price adjustments are done based on the pricing scheme of competitors. By selling at a price lower than competitors, you increase the chances that the customer will buy from you.
  5. Omnichannel Module is where thorough analysis should be done in all channels that you’re doing business in. This is the fifth stage where coordination is done across all online and offline channels. It helps normalize the price and keep dynamic pricing at a feasible value.

How To Find The Key Value Items(KVI)

Key value items are the top sellers. These are commodities that retailers can be sure the consumers will buy. The profit margin is generally based on these KVI’s. It isn’t as simple to fix KVI’s either. However, considering the wide range of products, even though 80% of the revenue is based on KVI’s, the profit it brings only chalks up to 50%. This disparity is the first sign that the dynamic pricing isn’t working to the favor of retailers.

Slashed prices will generate more customers, since that’s obviously something that benefits them.

How Customers Make A Decision

When a person finds a product on sale, that’s something that tells them that they should be ready to make a purchase. The person must have previously browsed through several products. This information is collected and dynamic pricing is applied on other similar products. This is the result of the algorithms and dynamic pricing.

When the customer finds the desired product at a discounted price, it’s natural for them to make a purchase. This naturally increases the sales that you generate.

Issues With Dynamic Pricing

Although dynamic pricing is useful, there are some issues that you should be aware of regarding its usage.

  • With the same products available at two different prices, a majority of customers will migrate to the store where the price is lower. Thus, the winning party will increase their sales. This leaves an imbalance in the market. This will go on until the next best price comes along.
  • A split economy where two different prices exist isn’t going to see any growth unless it’s uniform.
  • A system that’s dynamic can result in discrimination. You can’t have two prices on a single commodity for two different customers. But that’s ultimately the case here.
  • The focus on KVI will leave other commodities at a disadvantage. With the decrease in demand for non-KVI products, the customer will be benefitted. However, the retailers will experience a loss.
  • Similarly, retailers who have goods at higher prices in physical stores and lower in online stores also run a risk, since that persuades customers to buy from the online store and not the physical.

With the race in being the most successful e-commerce venture, dynamic pricing and slashed prices may not work in the favor of the retailers or in the overall economic growth. That’s why it’s important to ensure that you’re doing dynamic pricing only where it’s required.
Dynamic pricing banner

Find Out How Your Competition Reacts To Your Pricing By Using Incompetitor

Competition is the norm by which a pricing is often defined. Recognizing your customers’ needs and demands and acting on them quicker than your competitors can give you a pivotal advantage in an increasingly tough market. In addition, you must understand your competitors’ strengths and weaknesses and know how they will react to all the things you are reacting (it’s a closed circuit, really) so you can be one step ahead.

We’ve already talked about what your competition knows about your pricing. They already know what you charge, what are your bestsellers and how you deal with customers both directly and indirectly. Just like the truth in X-Files, they’re out there, looking and scooping around. Now, it’s time to turn the tables and let them worry how to react to your standards. We wanted to begin by saying that we’ll use our Incompetitor product for this experiment. Only, we’d be wrong as this is not an experiment but rather a proven, scientific method to determine the competition’s reactions and moves to your pricing. Silly us. Anyway, let’s proceed.

What is Incompetitor?

Incompetitor, if the name didn’t give away a little bit of the mystery, is a competitor tracking tool that helps businesses spot opportunities and market trends to stay on top. It provides quick and timely competitor insights about pricing, promotion, and catalog movement. Its large product database delivers benefits of a comprehensive and accurate, not to mention affordable data feed.

Now that we’ve sorted that out, let’s move on to the main question at hand.

How does it help?

The short answers would be – a lot or greatly. Both would be right and both would be wrong as they are true but don’t really show the nuances that make the tool so useful. These include:

  1. It has one of the world’s largest product databases

When we say large product database, we mean gigantic. Our proprietary database covers more than a billion products. That’s nine zeros. The tracking is done across 800,000 e-commerce websites and over 1100 retail categories. With that kind of data at your service, you’ll have no trouble finding out your competitor’s offerings and track the changes they make. On top of that, Incompetitor performs these actions across 29 different languages with the ability to convert the data back into English for a uniform dashboard.

Incompetitor dashboard

Incompetitor dashboard
Incompetitor dashboard
  1. It provides real-time data

There would be very few benefits of having a truly global volume of information at hand if it didn’t come with insights into actual developments during the process. Real-time insights allow you to see momentary developments in a shifting market and respond on the fly. You can receive instant reports at the time of your choosing on the newest price and product changes and trends, so you know precisely when your competitors make a change and know just how to react.

It also means there is no longer the need to waste (not spend) time browsing through competitor’s websites. Incompetitor does that for you by automatically monitoring products and their prices. As a direct result, this retains the highest levels of accuracy as it eliminates the human error. Speaking of accuracy…

  1. Incompetitor is very accurate

Through our proprietary categorization algorithm, we are able to deliver unmatched 95%+ accurate granular insights. We achieve these super-high levels of accuracy thanks to our attributes similarity feature which is plugged directly into our comprehensive database of attributes and a technology overlay that deliver near exact-match visibility. It’s not perfect but it’s very, very close.

How does it work?

Ah, you want to know about the inner machinations. Smart. As you already know, every brand or retailer has their own SKUs (unique URLs with product code) related to each product. Incompetitor tracks these SKUs and all other parameters or attributes of these products, such as price, product description, color, style, material and so on. From there, our own proprietary algorithm finds similar and exact matches and sorts them out according to a number of parameters you choose.

After you are done mapping all products for your competitors, the monitoring begins. Usually, price tracking is the first and foremost practice is such occasion but it can be sometimes misleading as sometimes retailers list products that are out of stock in reality, but keep their price tag on. That is why at Intelligence Node, we also focus on catalog gaps (product availability) and product visibility to get a complete picture.

It works like this – you enter your website, choose the category you want to cover and identify any number of competitors you want to track. And that’s it, Incompetitor does the rest of the work for you. It provides a real-time display of your and your competitor’s pricing, products, and their attributes. Customizable by nature, Incompetitor allows users to view data by a number of different parameters, including price range, product performance and assortment, internal feature offerings like shipping and much more. Trust us, it’s really that easy.

Conclusion

In today’s retail space, market research is an essential means to gain insight into your competitors’ prices, as well as the price customers are willing to pay for your products and services. It is crucial to set your pricing strategy at a level that makes certain your business remains profitable while preventing your customers from looking elsewhere and fleeing the ship. However, to do that, you need to have insight into how your competition reacts to your pricing.

That is where competitor price tracking tools enter the fray. Using these tools is no longer a hassle for thriving e-commerce businesses as automated solutions like Incompetitor ultimately save loads of manual labor hours and resources and ensure that customers don’t leave your store for better prices of your competition. By having access to Incompetitor’s vast library of data and accurate real-time insights, you’ll be able to balance competitive pricing with satisfactory profit margins while being one step ahead of everyone.

Step Up Your Game, Start Tracking Your Global Competition Using Incompetitor

Tracking competition can be a fool’s errand if not done properly. By properly, we mean using modern technology to cover all the aspects that define your competitor’s product and their pricing methods. In that regard, companies usually target competition that is nearest to them in terms of local positioning. Direct competition, if you will. However, ever since the triple W entered the mainstream, the scope has been slowly shifting to all corners of the globe.

That means conducting global market research has become crucial to good business practice. By tracking your competitors worldwide, you are getting a complete picture of the current market trends and creating more opportunities for your business. Still, not every automated competitor tracking tool is capable of such feat. Luckily for you, our Incompetitor is and we’ll scribe a few lines in this post to present you how, as well as what you gain out of it. Enjoy, we know you will

A quick overview of how Incompetitor works

First, a few words about the general principle behind Incompetitor. It covers over one billion products (numerically speaking, that translates to 1,000,000,000) that come from over 130,000 brands across 800,000 e-commerce websites. Our attributes similarity feature is plugged into our comprehensive database of attributes and a technology overlay that deliver near and exact match results. Based on this proprietary data clustering and normalization method, all the products we track are then mapped and split into 1100+ retail categories.

incompetitor subcategories

Top-ranked subcategories per Incompetitor

Thanks to this robust categorization, we provide detailed market benchmarking with 95%+ accuracy levels. Combined together with what we just mentioned, all of this produces more than one petabyte (PB) of data (equivalent to quadrillion that has 15 zeros) a month. That means one million gigabytes (GB) of data, if that’s easier to count, every 30 days. That’s sorting more that 30,000 GB of text and image data every day. A massive volume of information, indeed, but don’t worry – because we are a Big Data lab focusing on retail, this is a walk in the park for us as we know exactly what to do with it and turn it into something meaningful.

Those would be the main presentation points for Incompetitor. For a more detailed insight into the inner schemes of our competitor tracking tool, check out this in-depth post about data tracking technology behind it.

Now, on the focal point of this post – the global side of competitor tracking.

Worldwide coverage

The key word here is worldwide. Ever since the Internet broke through, businesses quickly realized the increasing value of the online aspect and soon added it to their portfolio to expand their operations. However, some didn’t realize it quickly enough and to this day, still struggle to understand the intrigues of online business.

Nowadays, your business has rivals in every part of the world, vying for the same pool of customers. That also means different sensibilities with the most important one – language. Covering a certain number of products is one thing, but understanding everything about it is a whole different story. In that regard, Intelligence Node (IN) can proudly say that we are the world’s first retail analytics platform that has a built-in multi-lingual feature. The purpose of this feature (or fonctionnalité, as said in France) is one of the utmost importance – it provides our customers with a single view of their global presence and overall market intelligence. What does this multilingualism means? It means that Incompetitor, which supports 29 languages, enables online businesses to benchmark competitors across markets irrespective of the catalog display language.

It that sounds a bit too vague for your taste, look at it this way. Out of the billion products that we track, there’s bound to be some of them in a different language, right? Sure, the price is a uniform code and the most prominent feature, for the most part, but that’s not all – there are other marketing mix elements to consider that constitute the product as a whole. That is why our SaaS (software as a service) offering has several levels of data curating. This makes sure that all data is normalized across different online stores (including language translation, category, and attributes standardization). Once the software normalizes the data, it utilizes IN’s patented similarity server technology to match the products.

Ease of use

Incompetitor converts all of the data back into English for a uniform dashboard. The end result is a neatly organized treasure trove of actionable insights for you to leverage. Our sophisticated machine learning algorithms are configured in a way to recognize patterns not only in the text-based information (the usual stuff – product name, description, availability, etc) but in images as well, where we apply deep learning to identify, extract and match. What you get is a truly global coverage of all your competitors, both in volume and in understanding.

trending products

An example of trending products in Indian currency

The plug-n-play approach of our competition tracking tool allows each user to slice and dice data in the way they see fit. It’s easy to set up and tailor it to your requirements. We also offer Open API frameworks and data delivery into native systems as available options for consuming the data. Either which way you want insights, you get them.

Conclusion

When it comes to the tracking of global proportions, we can safely say that Incompetitor passes with flying colors. Having real-time market intelligence is one of the most important aspects of doing business online. Our tool is an excellent way to tap new geographical markets and effortlessly map the competition while reducing the spending of your money, time and resources to a minimum. When you automate competitor benchmarking on such a scale, you can focus on your global sales and marketing efforts and enjoy all the benefits of competitive price intelligence on a worldwide level.

 

How Artificial Intelligence(AI) Is Helping Retailers Predict Prices

It safe to say that artificial intelligence (AI) is changing every aspect of modern living. From our phones to cars to healthcare and every other industry, AI is slowly becoming a common part of today’s environment, deeply embedded in everything we do. Retail is no exception, entering a new era of predictive commerce. Thanks to AI, retailers are able to cater to their customers to the tiniest detail possible, while also leveraging the technology to improve their business operations.

For this post, we’ll focus on how AI helps with one retail aspect that often troubles retailers the most – pricing. The tech behind AI, how it uses it to predict prices and what are the results – it’s all there in the following lines.

Inside AI

At the heart of AI is machine learning (ML), a process that has the ability to learn on its own without being explicitly programmed. Machine learning uses data to detect patterns in data and adjust actions accordingly so that, when it’s exposed to new data, it develops programs that adapt to that information. ML algorithms are closely related to a number of computational methods, such as computational statistics and mathematical optimization.

While this may sound rather boring, especially for those that never really liked math that much or were garbage at it, the reason why we are mentioning all the math babble is because ML is a standard method used to create complex algorithms that possess predictive powers. You might know this as predictive analytics, a number of analytical models that uncover insights through learning from trends and historical information in the data set.

Predicting prices

Machine learning has many approaches that constitute it – different types of learning if you will. It’s in your Facebook’s News Feed. It’s making Tom Cruise’s life a living hell in Minority Report. It can even predict when you are going to buy soup. Thus, we’ll spare you the nitty-gritty of it and focus on how the technology helps with price prediction.

In a nutshell, you have analytics software whose machine learning component is using a technique based on a certain statistical model (Gaussian process regression, Bayesian linear regression, multi-task learning and a number of other models) to create algorithms that automatically identify patterns from the data and predict prices based on that information. Patterns from huge data sets range from competitors’ pricing and inventory, purchase histories, product preferences to product demand and anything closely related to pricing.

As you can imagine, these parameters are constantly in flux, which is where machine learning comes in and adds a bit of nuance to the whole process that goes beyond simple price history. Suddenly, you have an accurate prediction of customer behavior, a whole system built around the individual and its needs. All of this is followed by high levels of automation, where the execution of produced data-driven insights is instantly applied.

It’s actually a practice that has been around for a few years. Back in 2014, Amazon was granted a predictive stocking patent that allowed the online retailer to cut down on delivery time and cost by predicting what buyers are going to buy before they actually buy it. That’s just one of the ways the company is deeply integrated with AI. For instance, sophisticated sorting algorithms are in charge of its warehouses. When an order comes through, the system almost immediately works out where the item is in its inventory and then dispatches a human worker to go fetch it.

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With prices, it’s a bit more complicated than that as there are more factors to consider. However, the basic principle is the same due to the highly complex and sophisticated nature of the technology. You have a pricing engine that helps you monitor competitor prices real-time. It then sorts them out and compares them to similar products, depending on the wide range of attributes selected, and ultimately optimizes prices.

What’s in it for the retailers?

For once, they get price predictions and optimizations according to numerous market fluctuations that go in line with their pricing and volume goals, among others. Thus, the ever-elusive pricing is no longer a problem. There is no Indiana Jones-like adventure to find that pricing sweet spot that will attract and retain the customers whilst raising the level of profit margins. In a way, retailers get an effective guide for their retail life cycle decisions.

Also, they get precious time back. Automated solutions are the future of retailing, even if they are still on the margins. They handily reduce the enormous amounts of time need for manual labor regarding tracking the prices of your competition. By leaving everything in the hands of automated analytics software, retailers, both online and offline, have more time to focus on other important and time-demanding aspects of their business.

However, the benefits of technology don’t stop there. With the scope of modern technology, it would be foolish to think that there is only a single layer of this cake. Retailers also get to center their operations around customers and deliver them a personalized experience which matches their browsing history and wish lists with cross-sell and up-sell recommendations as it’s all part of the package. They get automated re-orders whenever certain product stocks fall below minimum required levels. Assortment optimization? Check. Various adjustments according to the occasion, competitor Intel, product, category, season and consumer behavior? Check.

In summary, they get real-time market intelligence with all bases covered – a detailed understanding of human behavior coupled with large-scale automation and data integration.

Conclusion

As witnessed, the technology has come so far that not even retail giants are immune to the raging AI evolution. On the contrary, they are actively developing machine learning algorithms to further improve their businesses and receive actionable insights that were formerly almost exclusive to human intuition. In that term, retailers should take the cue and start thinking and acting like tech companies, utilizing artificial intelligence to not just predict prices and recommend products, but to take care of their customers, as well as their business, in an all-encompassing way.

 

If you found this useful and you’d like to learn how to take your pricing strategy to the next level, we invite you to download our free 20 secrets to designing the best pricing strategy eBook. Click below to take advantage of this opportunity.

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How Incompetitor Can Save You Time Spent On Manually Tracking Competitor Products

Introduction

In the world of ecommerce, there is so much going on that it’s hard to keep track of everything. You should be aware of what your competition offers while catering to the increasingly demanding customers. Often guided by pricing as their primary decision-making criteria, your customers can perform comparisons between your online store and others in an instant. Hence, being aware of your competition’s products and when to adjust your pricing is a vital process for e-commerce business.

In that regard, you have two options:

  1. monitor competitors’ prices manually
  2. monitor through automated competitor tracking software.

If your business is one of the (still) many that opt for manual tracking of its competition, then this post is for you, as well as those that still have doubts about the exploits of modern technology in ecommerce. We’ll show you ways how Intelligence Node’s very own tool can benefit your business in a plethora of ways. Behold the Incompetitor, a majestic wonder of technology, the crown jewel in the tiara of ecommerce, one to rule them all.

incompetitor

Behold – the Incompetitor

Well, not really, we’re exaggerating a bit but it’s a mighty fine tool that is a real lifesaver when it comes to saving time. Here is how.

  1. It can track more than a billion products

The importance of time in ecommerce cannot be underlined enough. This is especially evident when you have to keep an eye one a few competitors and their offerings. Imagine you need to track different competitors’ prices on 100 of your products. Imagine doing that manually. Do you know how many work hours is that? We know – way too much. There are not enough cells in Excel to cover that. Well, there are but you get the point. That method of work is not sustainable nor deemed fit for an aspiring ecommerce store.

On the other hand, Incompetitor uses a proprietary Visibility Algorithm (module) that actually tracks product movements. With high levels of automation, you are able to track more than 1 billion products on the web divided into 1100+ retail categories, thanks to our proprietary data clustering and normalization approach. In essence, what you are doing is letting the software crawl the market for you and give you the most accurate data more than once every day. You can’t really beat tracking millions of products through automated solutions, can you?

  1. Real-time insights

Having real-time knowledge of constant price changes of your competitors is a real blessing today. The market changes in a blink of an eye, practically forcing you to adapt dynamic pricing strategy to adapt to fluctuating conditions. Being updated with any change is critical to stay afloat in the growing ecommerce sea. By using an automated tracking solution like Incompetitor, you are able to see real-time market developments and take specific decisions to benefit from them.

  1. It minimizes data accuracy check-ups

It’s one of life’s unwritten rules – the more you work, the more your chances of making a mistake grow. The principle is applicable to almost every work process ever, especially when it involves large quantities of price data. We love Excel, we really do, but that type of workflow is bound to create an error here and there that can make a significant – negative – impact on your decisions. Checking for errors takes time, particularly when you look at the big picture. Practically as a rule of thumb, track anything manually and you effectively increase the risk of making mistakes. So, why would you choose to do so in the first place?

Not that automated solutions are error-free, but compared to manual labor, they’re light years away. Case in point – opting for a proven competitor price tracking tool like Incompetitor guarantees you 95%+ accuracy levels. Not bad, eh?

  1. It helps with price optimization

Incompetitor can assist in the price optimization process by stripping down the competition to the denominators you choose. A thorough data analysis collects and reveals the competitor price tags so you can strategize how to improve your pricing strategy. Here at Intelligence Node, we like to say – what’s the point in offering discounts when all your competitors have run out of stock? Here’s a more visual look into how Incompetitor rakes up the assists in the price optimization department.

incompetitor rules

Incompetitor – creating custom rules for tracking

In the image above, you can see we have selected a category (Fashion), a store (Zalando), and a brand (Adidas). What Incompetitor does is show the actual price, as well as both minimal and maximal price of the product during its shelf life. On top of that, it shows the status of each product as underpriced, meaning you can optimize your prices to act on that. This is what the Smart Price column is for as it offers an estimation of the optimal price for the product.

Incompetitor works best with our other offering – Inoptimizer, an equally powerful tool that identifies store inefficiencies and thus optimizes prices with dynamic pricing rules through automated price adjustments, whilst also providing forecasts and optimization scenarios for future consideration. On its own, Incompetitor is a handy tool for price optimization assistance, which ultimately helps save time in this fast-paced and changing business environment.

Conclusion

Checking manually all your competitors is a bad decision on so many levels. First and foremost, it can cost you a lot of time and money. While it is true that the majority of the competition tracking process depends on the size of your catalog, a smart pricing analyst knows it cannot keep up with the growing number of competitors, as well as all of the changes in the e-commerce ecosystem by using manual methods of tracking. It’s obsolete and inefficient in the long run, considerably sizing your scope of work to the barely acceptable levels, if so.

Staying competitive on the market means benefiting from an automated competitor price tracking solution like Incompetitor. It provides a far larger, virtually limitless scope of operations with real-time information and top-notch levels of accuracy. Even more, it allows your workforce to concentrate on other important aspects of your business while you sit back, relax and rightfully reap what you’ve sown. You’ve earned it by being smart.

 

Manually Tracking Competitor Pricing Vs Automated Solutions

Obviously, you should track your competition’s pricing. There is no question about that. With all the competition that’s constantly growing, consumers have their veritable pick of the litter. In essence, they are spoilt for choice and can easily find the best deals on the required products in just a few taps or clicks. So, in order to keep up with the savvy customers and competitors, businesses turns to price tracking. It allows them to be increasingly competitive and focal in their efforts while achieving greater profitability through the use of data.

In principle, there are two ways price tracking is done:

  • Manual tracking
  • Automated tracking

In a true gladiatorial nature, this post will pit the methods against each other and evaluate what’s the best option for today’s retailers. Minus Russell Crowe, of course.

Round 1 – manual tracking

As every pricing manager who ever dabbled in manual price tracking knows, it is essential to make an analytics based on the huge data acquired. Usually, there is a team involved that covers various aspects of competitor’s pricing by using Excel spreadsheets to keep all of the information in one place. The information itself is detailed as it can be and, as there’s a lot to go through by doing it manually, it takes time.

Ultimately, the enormous usage of both time and resources severely limits the scope and effectiveness of manual price tracking. Here is an example of how that works (or not, depending on your perspective).

Let’s say you have 100 products in your online store. It’s a nice, round number (why would we ever want to complicate this?) and in reality, it’s really not a big amount of products, but bear with us. Previously, you have identified five key competitors (also not a big amount) whose prices you wish to track. Now consider this – competitors change their prices all the time so if you choose to check them on a daily basis, that’s tracking a minimum of 500 references a day. Mind you, this is without taking into account more than one price per product, something which is a common feature depending on the product’s attributes. It’s a lot of time to be spending on only a select few of your competitors, not the mention the workforce needed to pull it off.

Rest assured – manual tracking works, but only up to a certain degree, most notably for very small businesses who don’t have a lot of offerings. Unfortunately, in today’s rapidly evolving ecommerce market and advanced technology, it’s far from being enough. Even if the amount of products offered in your catalog is tiny, the competition isn’t and that is your primary concern. Hey, it’s not like the competition doesn’t already know things about you, right?

Round 2 – automated tracking

Posing as a challenger in this bout, automated tracking solutions have a lot going on for them. Whereas manual efforts to gather competitive intelligence prove to be non-scalable and ineffective after a certain point, automated solutions don’t have that problem. They effectively reduce the amount of time your team has to spend manually tracking the prices of your competition. In turn, they have more time to focus on other important aspects of the business.

So, automated price tracking solutions are real time-savers. What else?

Every day, online businesses are operating in a growingly competitive environment that demands a proactive response to market fluctuations. It is impossible to deliver in such fashion without basing your decisions on readily-available real-time data. Your customers are checking prices on a daily basis and it’s easy for them to compare them. With the dynamic pricing on the rise, the ability to effectively and quickly react to shifts in the market presents a significant and highly sought for competitive advantage. Real-time data equals real-time pricing, which means your business will stay at the forefront. Tracking millions of products on the web is impossible through manual methods, but fairly easy with automated solutions like Incompetitor who help base your pricing strategies on a regular basis.

incompetitor software

Incompetitor retail analytics software

The accuracy of automated solutions is another advantage over the manual process as it allows for simple pricing updates. Things like price drops and promotions can easily be missed with manual tracking, which is not the case with automated price monitoring. This also minimizes the ever-present human error factor which has the power to significantly distort the accuracy of your data.

An automated price tracking solution allows a better overview of your market. It helps you perform an in-depth market research with no limit to the offerings you want to track. Additionally, it can also help you identify new competitors, along with the ones you are already keeping tabs on.

And finally, we dare say it – it’s much cheaper, especially for businesses who cover a wide spectrum of the competitor landscape by ramping up the manual labor in order to cover as much as they can.

Final round

Due to the nature of the business environment, online businesses today need every technological advantage they can get their hands on, in order to successfully track competitors’ pricing. On its own, technology is making it necessary and possible, even imperative to be more competitive by having real-time insights. This turns automated solutions as clear victors in this case. The return of investment by using an automated price tracking tool is fast, easy and, as evidenced, benefits you in many ways. While manual tracking gets the job done, for the most part, on a very small scale, it’s being overrun by the modern exploits of technology. Plain and simple, the scope of work is bigger, better and faster, as well as more accurate.

Conclusion

For an e-commerce store that is looking to keep a close eye on its competition’s pricing, there are many benefits to using automated pricing solutions. They provide real-time insights into how its competitors are doing business and allow for the making of the right decision in the right moment. Obtaining detailed and accurate data on the prices of competitors makes the most of your pricing policy and increases the profit margins, allowing you to stay competitive in the long run.

How To Provide Better Pricing Than Your Competition Without Jeopardizing Your Brand

Regardless of the industry, a business operates in, even if it’s relatively new or small, a careful research will reveal two or more competitors. Their existence immediately changes the playing field. In a concentrated effort to gain that one step ahead, businesses adopt numerous competitive strategies to increase their competitive advantage. That’s all fine and dandy, but how exactly do you cope with your competition? The most usual suspect in the case of intense competition is the price war.

This post will focus on all of the points of that endeavor, like what causes it, how to avoid it and how to set better prices without hurting your brand in the long run. All in favor of your business growing, say aye.

What can you do?

From a strategic point of view, the best way to come out on top of a price war is to never start it in the first place. If that doesn’t make sense at first, allow us to explain.

If or when your competitors opt to cut down prices in order to expand their customer pool, don’t resort to the same measure. Instead, approach the situation with a different, opposite way by differentiating your product to attain customer’s value of it. Here’s why.

Customer segregation

Essentially, every market is divided into three segments or classes of customers:

  • upper class
  • middle class
  • lower class

Each class has different paying capabilities and perceptions. This is very important because battling through pricing with your competition is a race away from the finish line. Competing solely on pricing basis is an effective recipe for being at the very bottom of the competitive ladder. What you are doing is serving the lowest segment of the market by default when you lower your prices as a reaction to your competitor’s discounting move. We’ve talked before about the dangers of underpricing – it’s hard to pull off as there is very little room for profit margins.

The bottom line here is the more you lower your prices, the more appealing your offering becomes to the lower-class target market (the majority of the market) and less appealing to the middle and upper-class. If your ideal target market is the lower-class, that is perfectly fine and good luck to you, but allow us to ask you this – why settle for the overcrowded bottom of the market when there is plenty of room at the top?

Re-target your audience

In the eyes of the customers, the price is often an indication of quality and more often than not, the quality is perceived as lower when the price is lower. In case your costs don’t allow you to lower them in order to maintain satisfactory profitable levels with lower prices, then your best bet is to re-target your audience. This will position your goods to a wider appeal in a specific market segment.

This is when focus on comparative value comes into the picture. Creating perceived value can ease your customers into the higher price than your competition, and quite possibly convince them that your higher-priced offerings are worth it. Your business might choose to embrace a psychological approach in order to fulfill that notion.

Product differentiation

Let’s consider Dan Ariely’s example of the The Economist magazine’s subscription plans. Ariely, a behavioral economics expert and a highly successful author on the subject, notice that the magazine offered three subscription plans:

  • the web subscription – $59.00
  • the print subscription – $125.00
  • both – $125.00

Ariely conducted a study with 100 students. 16 chose the web option and 84 of them chose the combo package. Nobody chose the middle option. At this point, you might have concluded that, as web + print subscription package costs the same, the middle option is useless. Ariely removed it and presented the two remaining options to a different batch of students, 100 again (who doesn’t love round numbers?). The results showed that the least popular option (the web subscription) became the most popular, with 68% students choosing it.

The narrative of the story is that the middle option was far from useless as it helped make a choice. In relation to our situation, customers have a hard time comparing different competitive products, which makes them highly susceptible to other influences. If the options are similarly priced, it becomes much easier to choose on perceived value.

Another way to get an advantage over your competition is to opt for competitive pricing. By taking into consideration what your competitors are charging for their products, you can either raise or lower your own prices in accordance with theirs. Naturally, you need to know when to adjust your pricing and how often to do it. Or, you can choose the dynamic pricing where a price is never firmly set. Instead, it changes constantly to suit the ever-fluctuating market conditions. There are various possibilities for your business to provide better pricing than your competition. However, only an in-depth evaluation of your business goals and your competition can reveal what price best works for your product.

How to know when and what?

It’s easy to say “price your goods smart” but what does that actually mean? Of course everybody wants to have a smart pricing that best reflects the customer’s willingness to pay in current market conditions. Nevertheless, it sounds and looks way harder that it is. There is a whole bunch of competitors vying for the same market share you are. With so many different products on display, it can be tough, almost impossible to stay ahead.

With the fairly recent expansion of big data analytics, you can make more accurate and faster price adjustments through pricing intelligence software. Through gathering and analyzing data about a particular customer or a group of them, a business can predict what price tag the customer deems acceptable to pay and adjust it accordingly. These software tools like Incompetitor and Inoptimizer provide high levels of automation, saving you time and precious resources that can be better used elsewhere. In addition, because the market fluctuates all the time, you have the option to create customized pricing rules which adapt to certain market trends and shifts.

price intelligence software

An example of Intelligence Node’s price intelligence software

Conclusion

If you ever find yourself thinking what are you going to do about the competition, remember that there are always choices. Providing better pricing requires a dedicated effort to finding that ultimate pricing sweet spot. It’s a constant process as markets never stay put in one place, which is why you need to constantly keep an eye on both your prices and competition. That means researching and researching means tons of data. Luckily for you, there are analytical tools that amass that data and turn them into actionable insights which can help you track your competitor’s prices and help you optimize yours so you are always on the right path – growing your business.

How Often Should You Adjust Your Pricing?

Every business that seeks to achieve maximum levels of profitability needs to think carefully about its pricing. Specifically, it needs to think about how often to change its prices. Once you identify and set the best pricing strategy for your product or service, it can be quite tempting to hold on to it. We know how you reason and we empathize – you spent considerable time and effort to set it up, it works so why would you ever change it?

Well, you simply have to because every aspect of the market fluctuates. Your competitors, products, customer demand – everything. That being said, each aspect can have a direct influence on that ideal price you envision for your product. As with the majority of the price-related issues, there are certain pros and cons to adjusting prices on a frequent basis. Businesses need to consider both sides of the pricing equation before deciding on how often they intend to change their prices. The change can have a huge effect, both positive and negative, on you and your consumers so this is not something to take lightly. As always, we are on the job to make that decision as smooth as possible.

How often to adjust your pricing?

First, it’s important to know that there is no general rule of thumb when it comes to modifying your prices. This is because of the frequency of changes within the market. Just look at the data for Motorola Moto G Plus smartphone, an older model. In the first week of May, there have been five changes in pricing for it. In addition, the growth stage of your company can also play a role in the proceedings. For instance, a small business might want to adjust its pricing in order to increase its market share while a larger company with more experience doesn’t necessarily have to frequently adjust its pricing.

When is it okay to do it?

There are common reasons to both increase and decrease your price. When it comes to raising your prices, it’s okay to do it when…

  1. Your competition is charging more for less

If your competitors are cashing in on the virtually same product for slightly less of it, whether it’s the quantity or lower number of features or else, this is a signal that you can raise your prices. The key here is to accentuate the unique value your goods bring compared to competitor’s offering, especially if it’s a similar product at a higher price point. Customers are often willing to pay more but they need to know why your product is superior.

  1. Costs increase

When costs for the company increase, it’s rather normal to raise prices to offset the change in costs. This includes rising raw material, labor costs, changes in packaging and so on.

  1. Inflation happens

During inflation (or periods of it), companies need to raise prices to maintain profitability, particularly if the increase is significant. In such cases, it’s better to do it gradually and raise the price over time instead of making one quick and large increase.

Businesses might also consider lowering the prices when…

  1. The competition reduces its pricing

If one or more of your competitors significantly reduce their price, you may need to follow suit and do the same in order to remain competitive.

  1. You want a larger market share

If a part of your business strategy is increasing your market share, then you might want to decrease your prices to encourage customers to pony up the cash.

  1. Costs decrease

As costs regarding your product lower, you can opt to decrease the price as well. This might make your product and brand more competitive while improving the ever-valuable customer perception by rewarding loyalty.

  1. When you want to get rid of your inventory

Getting rid of your remaining inventory in favor of new versions of your product almost automatically means prices go down. Take hardware companies for example – every new smartphone model means the older one is cheaper. Or, if you are selling clothes, seasonal products like winter jackets and sweaters don’t have the same pull in April.

In any case, whether you want to raise or lower your price, the change must reflect your overall business strategy.

When is it okay to leave current prices?

There are also times when it’s best to stay put despite the market changes. This is strongly recommended in situations where shifts in the market don’t affect the greater part of revenue. Speaking strictly from a business standpoint, it’s always better to leave things as they are than rush or make a poorly planned change that diminishes your relationship with your customers or even worse, ruins your margins. This brings us to our next question…

How to know when the time is right for what action?

This is the trickiest part of the equation. Setting the price is a constant, ongoing process that requires tons of research. The math is simple – your company will make more informed decisions when backed up by research.

The past several years have seen a significant rise in technology use. It has effectively shifted the very core of price changes. Most notably, regarding our topic today, pricing optimization software helps businesses join all kinds of pricing data to form dynamic pricing methods that take into account a variety of factors like competitor actions, customer demand and more.

Think about it. There is a whole list of your products that require price optimization at a product level to stay ahead of the competition. The need to account costs, customer, and sales performance takes time and resources. With dynamic pricing, a company is able to adjust its prices on the fly in response to market demands. With the rise of big data analytics, price adjustments can be made much faster as time is of the essence. By collecting and analyzing data about a particular customer, a business can more accurately predict what price the customer is willing to pay and adjust it accordingly. Since automation is key here, you can also create customized dynamic pricing rules which can follow certain market fluctuations.

Conclusion

Your pricing strategy demands round-the-clock maintenance to keep your business growing. A new pricing strategy could perfectly align with the changes that have occurred since your last price update. It’s imperative that you research and analyze the market landscape on a regular basis and make price adjustments accordingly. The market doesn’t stay the same and neither should you. Bear in mind that prices should be adjusted only as often as your company’s objectives and goals dictate. Otherwise, you’re preaching to the choir and they’re not listening.

 

Your Competitors Already Know This About Your Pricing Strategy

Keeping an eye on what your competition is doing is a great way for growing your business. Identifying who they are and what they are offering can prove invaluable to make your goods set apart from the rest. It will enable you to set prices competitively and utilize all the elements of the marketing mix to the fullest. If you know or learn a few secrets on the way, all the better but the bottom line stays the same – the more you know about your competition, the more your chances for success grow.

The key part here is that, just like customer loyalty, this is a two-way street. The same way you know various information about your competitors, so do they about you. They are out there, “preying” on your customers, just as you are theirs. At least, you should be, which is why this post will highlight what the “other side” already knows about your pricing in order for you to remain competitive.

  1. They know the prices you charge

Obviously, without breaking a sweat. Your competition is legally spying you, plain and simple. They are everywhere. A quick glance at your website provides the basic information they need. They are following you through your newsletter and getting regular updates about everything, including price-related issues. The prices you charge might not fully suit your competitors and vice-versa but they do offer a good glimpse into what your business considers under competitive pricing. However, the price tag alone doesn’t say much without deeper analysis as you leave a significant amount of data online, ready for scooping. And that means…

competitive pricing

Example of competitive pricings Image source: Website Magazine

  1. They know which of your products sell

Naturally, there are some products that sell better than others, making for certain product groups that generate the larger part of revenue. For that matter, calculating the demand for these products is essential as the result is a list of the products suitable for price benchmarking. This is a far too big of a game to leave anything as is. Through the magnifying glass, your competitors are tracking your goods that are most in-demand or being promoted, as well as your fast-selling products in order to optimize their own product site positioning. They can easily benchmark their prices versus yours and adapt their strategy if needed because they are constantly watching you and know the breadth and depth of your catalog.

  1. They tap into your social media

Social media is a powerful tool and a treasure trove of information if you know what to look for. We’ve already mentioned signing up to a newsletter and receiving information directly to inbox. Relevant social communities like Twitter and Facebook offer means to your competitors to stay in the loop regarding discounts, promotions, special offers and anything that gives a clue about your pricing. It’s a cheap and easy way to spy as all they need to do is follow and observe. Inconspicuous social presence on competitor’s social pages can also help identify how your customers react to prices by sifting through their comments, particularly the ones that are directly related to pricing.

  1. They go through the checkout process

Playing secret shopper (albeit, in an online form) is a good way for your competition to compare things such as price, products and customer service on the spot. It’s also great for your competitors to gather insights into the complete checkout process, including cart abandonment and what offerings customers receive at what prices. This form of “spying” can raise internal operations on a higher level by acknowledging both the good and bad side of the experience..

Beat them at their own game

To either side’s benefit, pricing is a tangible, observable source which can provide a lot of information about competitors offerings. Since they are fully aware of your products, know the prices and have a solid understanding how you set them, why not do the same?

Everything we’ve said so far about your competition can be said about you. In the global e-commerce market, there are literally millions of sellers that seek their fortunes online. As the market shows no signs of backing down in terms of growth, the competition builds up even more. Coming up with a competitive advantage is harder than ever so you might want to consider using competitive intelligence. Competitive intelligence (CI) consists of multiple layers regarding everything your competition and market represents. It’s one giant learning process about all the things that both directly and indirectly affect your business. But how does it affect your pricing in this case?

competitive intelligence

Using competitive intelligence software to stay competitive

Your competition leverages modern technology to stay on top of you. It’s that simple. This includes being proactive on the Internet and “following” you around, but more importantly, using advanced, yet accessible technology.

For many businesses, it is still a standard practice to rely on a team of people performing manual searches of rival products and prices. This naturally implies that businesses need to invest valuable time and money that could be much better employed in improving other stages of their business operation. As we mentioned before, there are thousands (probably more) of your counterparts around the globe in your industry. Identifying them, especially the ones that are your direct competitors, and then identifying their pricing is a long and arduous process. Let’s not forget that prices are not set in stone which makes the task all the more difficult (as it weren’t difficult enough before). So, what can you do?

Instead of relying on manual price tracking, companies use fully automated competitor price tracking solutions. These software suites help e-commerce businesses track competitor prices automatically, instead of relying on resource-heavy manual operations. There are pricing intelligence tools such as Incompetitor and Inoptimizer that put real-time competitor pricing and positioning data at your disposal. These tools will make sure you are constantly in the loop and able to access the data and trends that will ultimately allow you to make vital pricing decisions. That way, you’ll be able to track your competition in real-time and utilize what you learn in order to keep your business one step ahead.

Competitive intelligence software provides an accurate assessment of how products and services are performing on the market. With the help of the data that your competitors are going to collect via competitive intelligence software, they can effectively boost their sales and conversion rates, know the real position in market without spending huge amounts of time, money and manpower.

Still, when you set roughly the same prices as your competitors, then you slowly lose any differentiating factors. The focus shifts to what you are offering and if you can offer more and/or better features at the same time, it’s a win-win scenario. If not, you need to find a key differentiating factor. This can be anything from the unique value your product brings (highlighting why customers should buy from you and not your competitors, practicality of it, etc.) to things like packaging, customer service and more. Catering to prospects through your product’s benefits and the problems it solves is a sure-fire way to turning them into buyers.

Conclusion

If there’s a silver lining in this story, it’s that you can never appreciate enough the importance of analyzing your competition. It can help you form pricing strategies that will capitalize on opportunities and reduce the impact of threats from competitors. They already know so much about your prices that it would be foolish, to say the least, not to use yourself what’s practically handed over to you. You only need the key to open that door and the key is competitive intelligence.

Everything you find out about your competitors is valuable, especially prices. They can tell you if there are any gaps in the market you can effectively exploit, indicate whether consumers are saturated in certain areas of the market so you can make assessments and much more. It’s all easier said than done which is why you need help, preferably in the form of pricing intelligence software than can track millions of products and produce real-time insights. Also, if there is any aspect of your goods you can improve, go for it as that just might be the key differentiator, along with the pricing intelligence tools, you need.