How To Analyze And Identify Ways To Improve Existing Retail Financial Operations

Introduction

Online retail businesses have to a lot to worry about and fight against but perhaps nothing quite screams danger as the financial aspect. Shallow pockets and thin resources, overwhelming competition from both big brand-name businesses and and smaller online retailers, declining sales and so on – these are just some of the challenges faced on a regular basis. Thus, it’s only natural to try and squeeze an extra dollar here and there out of the existing financial operations. Naturally, there are some quick fixes that turn things around but these are all short-sighted solutions. Any online retail store built on a sound financial basis knows better than this but not every business has the benefit of that insight.

So, what can you do?

With growing pressure to generate better sales and minimize costs to increase profits, you must center on creating more revenue from your existing operations while continuing to add new ones to the fold. Easier said than done, right? Not necessarily as there are some things to consider in order to improve your retail store’s financial operations. Don’t worry, we’ll let you in on what you need to do so you can do right by yourself. Ready? Let’s go.

  1. Forecast your future

To get a good sense of how your money is flowing around and what the future holds in that regard, what you need is a financial forecast. Being prepared for the future endeavors, especially in the case of growing businesses, allows the power of foresight to know what to expect and how to deal with unfavorable movements, which are all but bound to happen in the tense retail market. A financial forecast is one of the best practices for small and medium retail online businesses to gain meaningful insights on both a monthly or weekly basis. It will allow them to identify peaks in expenses in time of their most selling periods and show where income will be the highest. There is a good, accurate and fast way to do it, which brings us to our next point…

  1. Leverage technology by using retail analytics

If there is one thing that makes life on this planet much easier, it’s technology. Running your financial operations can also be much easier if you utilize it the right way. In the case of the aforementioned forecast, the process itself could be as simple as paper and pencil or a digitized version of it in the form of an Excel sheet. Or, you can opt for retail analytics software to get a more formal and accurate result. Naturally, two of the three methods are time-consuming and largely inefficient but are also deemed as more financially acceptable solutions. Looking long-term, they are also not sustainable, something that modern tech puts maximum effort in.

On its own, technology is an investment with significant proportions. However, what you get in return far surpasses the investment-to-benefit ratio. For instance, transferring your modus operandi on cloud simplifies and streamlines the whole business operation and puts in on a higher level. By “upgrading” to cloud technology in the form of retail analytics, you make your data open for multiple users from different locations to access the data and work on it. The software helps minimize the risks of human assumptions that can trigger margin loss, overstock situations, and missing the boat on market trends. That directly impacts the efficiency while reducing labor costs. And that’s just one example out of the many features retail analytics software possesses..

In retail, it’s imperative to know as much about the market as possible. In that regard, you can leverage technology to use data analytics to improve operational performance across all channels. Having insights into store-level demands in real time makes sure your bestselling items remain in stock. Optimize your pricing by keeping a close eye on competitive pricing and discount strategies. From the marketing standpoint, gaining visibility into promotional performance can help you adapt your strategy, while also benefiting your forecasting and recognizing various market movements like seasonal trends, hot items and different opportunities to maximize revenue.

Ultimately, this translates to a win-win scenario – more satisfied customers and reduced cost for you. The bottom line here is that using technology can help your retail store in a variety of ways, from improving productivity by automating a bunch of manual tasks to helping you better oversee your inventories and everything in between. Speaking of inventory…

  1. Perform inventory segmentation

Because of the large scope and competitiveness of the retail market, a business is better off segmenting its inventory. Why? Because an inventory is not just a statistical overview. Looking at it, you want to gain insights into your sales. Does your cash flow revolve around products that don’t sell on a regular basis? Can you use that money to create better profits through other better-selling items? There could be lots of money tied up in inventory without actual good reason. It’s all about meeting customers’ demand and needs.

Because the way online stores function, much of their data insights are broken into pieces, spread across the organization. Collecting that data into a single, comprehensive view allows better financial results because you get a scoop on things like growth, consumer trends and else. By uniting and integrating all of its data into a single source, an online retailer is set to reap the benefits of knowing its most important competitive performance metrics, as well as make better overall business decisions. And faster, too, as nothing beats on-the-spot insights.

inventory management in retail store

An example of inventory management in a retail store

Source: LinkedIn 

Conclusion

Retailing is as much about local mindset as it is about thinking globally, with the whole world as a selling stage. As such, it provides ample opportunity and company, which is where handling of your financial operations comes into play. A retail business simply must understand its financial numbers and what they are saying about the state of the business. Along with financial statements, business analysis and intelligence are key to making that happen. Going the modern tech route allows you the dissect all the financial angles of your operations, while also providing you with the benefit of time to have other bright ideas that can improve your business’ standing. That way, you will be able to devise an accurate business plan and hit all the right spots.

What IKEA Can Teach You About Retail Cash Flow

Have you ever wondered what are the secrets of efficient back-end operations, seamless supply chains and almost inexhaustible cash flows of large retail companies like IKEA? Well, we have, and what we found out will expand your horizons and help you grasp what it takes to have an efficient cash flow mechanism. Elements of an efficient cash flow incorporate more than one component and in and of itself, cash flow cannot exist without management systems in place. Obviously, the most efficient management system can be found in IKEA, a retail giant with €34.2 Billion (with a capital B) in sales in 2016.

Continue reading “What IKEA Can Teach You About Retail Cash Flow”

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.

I'd like a FREE copy

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.

I'd like a FREE copy

All About Incompetitor’s Accurate Data Tracking Technology

Introduction

Market research has asserted itself as one of the primary ways of functioning for online businesses. In the grand scope of online retailing, there is so much competition that makes it hard to count a fraction of them, let alone all. It takes a lot of dedication and thoughtful planning to acquire the competitive advantage in a crowded market. Almost by default, market research is also one of the most difficult aspects of running a modern business as there is so much to cover. At least, that the general perception.

Just like wearing sunglasses at night, that perception is plain wrong mainly due to the rapid advancements in technology. Today, we have automated tools that cover a great deal of business spectrum, most notably the competition. These tools make a business owner’s life much easier as they do much of the work and simplify the whole process by streamlining it. One such tool is Intelligence Node’s Incompetitor, a retail analytics software suite that lets you monitor the metrics that matter most to you. In this post, we’ll shed some light (no need for sunglasses yet) on how the tool actually works to give you a better insight into just how much helpful Incompetitor really is.

The process

The story goes like this: we track product movements through our own proprietary Visibility Algorithm. The fancy computer program crawls using competition SKU codes (unique URLs with product code) as one of the many attributes provided. These can be price, product description, color, material, style, pattern and everything the program can use to create matches. Then, based on our proprietary Exact & Similar Match Algorithm (we have a bunch of cool algorithms), we assign scores and define the products as either Exact match or a Similar match. That way, you can compare your products and monitor what products are performing well on competitor websites.

One key note to address here is that, unlike some tracking programs and services, we base our data on multiple points. What this means is that we are able to offer more refined, in-depth analysis and insights by showing actual competitor SKUs apart from selling trends, product launches and assortment gaps which are common stance when it comes to a competitor benchmarking product.

incompetitor

An example of top trending Fashion subcategories in Incompetitor

The volume

There are more than 1 billion products on the web in play here so you’ll understand when we say we have one of the largest global coverage (if not the largest, but we’ll give others the benefit of the doubt) you’ll find. Subsequently, all the products we track come from more than 130,000 brands and are mapped and divided into 1100+ retail categories, all based on our proprietary data clustering and normalization approach. This allows you to survey as much of your competitors as you like without worrying on whether you’ll miss something. There is enough Incompetitor for everyone to go around.

The accuracy

To have any use of such a wide scope of tracking, the data needs to be highly accurate to pay off in the end. Our robust categorization algorithm provides unmatched market benchmarking view with 95%+ accuracy levels. That’s it, no need to explain further. It’s not 100% perfect, but it’s really, really close.

The outcome

Now that we have explained the inner machinations behind our little wonder of technology, all that is left is to highlight the practical points of Incompetitor. Naturally, with an all-encompassing solution that covers millions of products automatically, there’s bound to be lots of benefits too.

incompetitor example

All of the data is real-time which means you can react instantly. For instance, let’s say you are tracking Adidas’ Trefoil t-shirt, featuring the company’s iconic logo. Other tracking parameters or attributes would be color, gender, sleeve length (short, obviously), type of fabric and neck, pattern – you get the point. As you can see in the screenshot above, this particular t-shirt is out of stock. Incompetitor then sends you a real-time alert so you can capitalize on the opportunity and optimize visibility of your exact or similar products. The result – you effectively identified a brand-level gap in competition’s catalog, just like that.

 

The same goes for whenever the competition launches a new item or a whole product line. You get a real-time notification on your dashboard, complete with product description and link to the product. In a nutshell, Incompetitor identifies competitor products that are an exact match to yours or as close as they can get. Through an advanced search of product attributes, you will be able to check real-time prices and discounts for products that are similar to yours. This allows you to discover each and every hottest selling item on your competitor’s online marketplace.

 

You will also receive a detailed overview of the historic price fluctuations to further study the product’s history and thus help you put together a comprehensive competitive analysis by understanding how competitors perform. In turn, this will yield actionable insights that will help you formulate pricing strategies so you can adequately respond to market conditions and grow your brand’s presence. It’s a scenario where everybody wins. Well, everybody except your competitors but that’s the point, right?

Conclusion

To sum things up – Incompetitor, as the name suggests, is a competitor tracking tool that helps online businesses spot opportunities and market trends to keep them one step ahead. It delivers fast and timely competitor insights concerning pricing, promotion, and catalog movement. Virtual real-time product and price tracking means you can react swiftly to rising opportunities quicker than anyone else.

With one of the world’s largest databanks containing more than a billion of products at its disposal, Incompetitor simplifies retail data analytics thanks to data visualization options that add a whole new level of interactiveness. That way, users are able to strip the competitor’s offerings down to the whatever denominators they want, be the usual ones like the price range or the product specifics like the color (or a combination of them), materials and so on. What you end up with are invaluable insights into your competition that can help you keep on top, where you belong.

 

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.

The Quick And Easy Guide To Retail Management Systems

“The customer is the king.” This is the motto of every retailer today, and for a good reason.

It’s every retailer’s responsibility to ensure the customer is more than just satisfied with their shopping experience in order to retain and draw new customers. With this attempt, retailers are now extending retail management beyond their products, by taking into account the busy lifestyles of customers and providing services.

What Is Retail Management System?

The process of amplifying sales and customer satisfaction through a better understanding of consumers, products, and services with respect to a specific company is termed as retail management.

The strategy of typical retail management systems is to research the retail process from the manufacture of the product, its distribution among retailers, and finally the customer feedback. It includes several steps to procure the necessary details. Ideal retail management systems should ensure the customer is satisfied with his/her shopping experience and should be able to shop with no difficulty. It gives the customer the convenience to locate the product easily, save time, and be satisfied with the overall shopping experience.

Now that you know “What is Retail management system?”, let’s take a quick look at why you need retail management systems.

  • Retail management helps keep the store organized. So if a customer comes to you looking for a particular product, you can easily guide them to it. You can do this by grouping similar products according to the age group, gender, and frequency at which the item would be bought. Labels also can come in handy to achieve this. Also, ensure there is ample stock of products and that the customer must not be kept waiting for too long.
  • The other important necessity for retail management systems is to keep a track of the products and their sales and prevent shoplifting. This can be done by simply assigning a unique SKU to each product, which makes it easy to identify and track the item. Additional measures like CCTV surveillance can also be helpful.

What To Look For In Retail Management Systems

The essential set of digital applications that help make the retail management process easier and help run your business through smooth operations are called retail management systems. Here are seven of those features that can help you get the most of retail management systems, by enhancing customer experience along with your profit margin.

A typical retail management system would be comprised of a Point Of Sale (POS), Customer Relationship Management (CRM), Sales Order Management, Purchasing and Receiving, Inventory Management, Reporting, and Dashboard applications.

Here are six features to keep in mind when considering retail management systems for your retail outlets:

  • Platforms For Convenience

Ideally, retail management systems must help customers with mobility. In a world dependent highly on smartphones and computers, it is essential that the customer should be able to look up the inventory right from home, at his/her convenience. An e-commerce store also helps promote sales to a large extent. A good retail system should be enabled with plug-ins that help you launch an e-commerce store without any hassle.

  • Optimizing Through Dashboards

A dashboard is a graphical summary of various important information put together in order to have a quick overview of the necessary aspects of a business. With the help of a dashboard, you can analyze the retail management in a simple manner and optimize inventory, staffing, and even trading through real-time operations.

  • Offering Loyalty Programs

Customers are attracted to loyalty programs and rewards on their shopping. Typical retail management systems help administer rewards to customers, while also keeping track of the points earned and redemption of points by each customer.

  • Cross-selling And Upselling

Cross-selling, in plain words, is when you encourage a customer to buy complementary or similar products after looking at his/her purchases. Upselling is when you encourage a customer to buy the same product from a better brand and upscale their convenience along with your sales. Ideal retail management systems can keep a track and group similar products, which helps the sales representatives make the necessary recommendations to customers during transactions. This not only boosts your revenue but also enhances customer satisfaction.

  • Flexibility Of Payment

A good retail management system gives the customer the convenience of payment through several modes—cash, card, gift vouchers, and digital applications.

  • Promotions

Making use of multi-item promotions allows retailers to set their own prices for customers with the information gathered from their shopping history and current purchases.

Inventory Management Software

An inventory management software is a set of business applications that keep a record of the product sales, material purchases, and a number of other production processes, while also helping optimize and manage these processes. The main aim of this software is to lower the time and efforts spent on basic product tracking and use the same resources in enhancing the efficiency of the system.

Inventory management software helps keep track of their products through barcodes and radio-frequency identification (RFID).

Benefits Of Using An Integrated Management System

An integrated management system, much like an inventory management system, focuses on integrating all of an organization’s systems into a single framework that can be used by the involved members for various functions and at several levels.

Some of the important and basic advantages of using an integrated management system in retail management are:

  • Increased efficiency
  • Cost reduction
  • Maintaining a balance between the various practices
  • Reduction in duplication of efforts
  • Elimination of conflicting responsibilities
  • Maintaining consistency in performance
  • Enhanced communication internally and externally
  • Making business goals the prime focus
  • Making it possible to have awareness and training programs for enhanced efficiency

By inculcating retail management systems into your business processes, you can not only amplify the efficiency and quality of your retail service but also simplify the process and divert your time and efforts into achieving bigger goals for your organization. With the bonus of enhanced customer satisfaction, you can raise the threshold for your profit margin and provide better services to your customers. Ensure you look for a system that takes into consideration all the needs of your retail outlet as well as your customer to provide that top-notch shopping experience.

10 Retail Marketing Blogs You Need to Read

There are blogs popping up left and right, claiming to have the freshest, most juicy information on making money in the marketing world. How are we to know which links are worth our while? How many times have you clicked on something promising, just to have to sift through a bunch of blabber and jokes that aren’t funny in order to get what you need? OR, maybe you’re the type that enjoys a little humor with your info! Continue reading “10 Retail Marketing Blogs You Need to Read”

7 Pricing Mistakes to Be Sure to Avoid

Pricing. It’s the part of running any business that has professionals facing sleepless nights and constantly second-guessing themselves. After all, how can anyone ever truly be certain that its approach to pricing is the most effective means of delivering products and/or services to willing customers? In the ultra-competitive world of eCommerce, this pressure to optimize is even greater, given the ever-evolving online marketplace. What will work best for your specific niche may vary, but let’s go over a few fundamental pricing mistakes that you’re better off avoiding completely.

Pricing Mistakes to Avoid Like the Plague

1. Assuming that lower prices deliver the best results

Common sense dictates that the lowest prices are bound to connect with your target audience, but believe it or not, this isn’t always the case. In fact, lowering the prices of your products too drastically can cheapen the perceived value they carry for consumers. Rather than sacrificing too much of your bottom line in a desperate bid to win sales, aim to price your products based on what they offer to your customers. Find your product’s sweet spot on the price quality matrix to determine how it’s viewed by your customer base.

2. Not featuring a variety of options

Today’s consumers are accustomed to numerous options whenever they make a purchase. So be sure to offer multiple price points for various versions of your products as well as customizable shipping and delivery selections for customers to choose from. This allows them to personalize their checkout process and offers a whole different level of engagement that ultimately makes them feel more instrumental in shaping their purchase.

3. Not practicing customer segmentation

Because every customer brings his or her own needs and desires, it’s best to treat them as such. Break your customer base into different types of individuals through customer segmentation. Once you’ve defined the kinds of people who buy your products, you can tailor your approach to include everything from how you package and present your product to (naturally) the price point you use. This enables you to take full control of the perceived value various groups have of what your company is offering.

4. Overcomplicating your offer

In keeping with the integral role that presentation plays in shaping your pricing, you should remember to keep things as simple as possible. This oftentimes includes such minute details as not including unnecessary decimal points and other punctuation in how your prices are displayed to how many syllables they take to pronounce aloud. The smoother and easier it is for customers to comprehend your price points, the faster they’ll be able to move through the purchase decision phase and on to checkout.

5. Postponing the embrace of automation

One of the most prominent trends in retail right now is the integration of automated systems to help optimize pricing. Using a variety of key data points, this more fluid approach to setting your price points removes the guesswork of how high or low your prices should be. Moreover, it makes it far easier to determine the best way to target certain segments of your customer base.

6. Not testing new approaches

Without trying new approaches to pricing, your business is certain to wither and die over time. That’s why consistent testing needs to be a part of how you do business, if it isn’t already. New pricing strategies are being developed and discovered all the time, but your business won’t be able to benefit from them unless you’re willing to give new pricing techniques a legitimate shot. Try some A/B tests to see how new types of pricing compare to your tried-and-true methods. Then you can simply implement those tactics that demonstrate worthwhile performance.

7. Not focusing on the customer experience

As stated above, perceived value should be the paramount determining factor in how you price your products, more so even than what your competitors are doing or what you feel may offer the best deal to your customers. This is because perceived value puts you squarely in the position of your target audience, keeping the customer experience front and center. Rather than too strictly adhering to your company’s own costs, follow your customers’ perspective, and you’re bound to be better off.

For more invaluable insights into how you should approach your company’s pricing, check out our Comprehensive Guide to Competitive Online Retail Pricing Strategies.

Retail pricing ebook CTA