A complete Guide On Competitor Price Tracking for 'Ecommerce'
Yes, that is exactly how much the e-commerce businesses future looks like. With almost every buyer today running towards the online platform to reach out to their needs, the e-commerce business has been witnessing a great number of increase in its product stock as well as conversion rates.
If you too are an e-commerce business owner, you are well aware that what makes your business stand out from the rest depends on a few significant factors such as:
- Brand identity
- Product being sold
The last sector has been highlighted because ‘Pricing’ is considered to be one of the most important assets for an e-commerce business to sell to their prospects.[ “Pricing is actually a pretty simple and straightforward thing. Customers will not pay literally a penny more than the true value of the product.”– Ron Johnson, the former chief executive officer of J. C. Penney [New York Time, 2013]. ](https://blog.blackcurve.com/10-quotes-why-pricing-matters)
For instance, say if you want to purchase your current needs online and you see that there are over thousands of vendors who are selling your exact needs. How would you differentiate and pick the right vendor for you?
You would consider the below factors:
- Does the solution being offered is too expensive?
- Are they really selling my needs at such a cheap rate?
- Does this cost price accommodate everything needed to fulfill my need?
For a buyer, whether it is you or your prospects, price is such a factor that is considered on high priority which is exactly why many e-commerce businesses fail due to lack of pricing knowledge. You are well aware that you can’t quote a random number, you need to plan pricing which could cover everything such as:
- Resources cost
- Manufacturing cost
- Other expenses (labour)
To top that list, you would also expect good profits in return. Keeping this in mind, this guide has been created to help you understand why pricing matters, how you can easily understand competitor price tracking and holding that thought in your mind, how can you create the right pricing strategies which will earn you great profit, grow your brand and sustain your success rates higher.
But before we jump into the context, let’s first brush the common terminology of ‘E-commerce’.
What do you mean by ‘E-commerce’?
E-commerce refers to electronic commerce, a business that is conducted via the online platform. The world has gone digital, a time when visiting the local shop was a trend then the modern scenario demands business owners to create a shopping experience where a user can simply with one tap purchase all their needs anytime, anywhere.
The 2020 market is evolving, technology is growing, we live in a scenario where every buyer wants to live and experience convenience in their life. For instance, instead of selling products door to door, you can use social media to reach out to a larger audience to sell your products. This is exactly what the world of e-commerce indulges in.
The e-commerce business has many different models such as business to consumer (B2C), business to business (B2B) and much more. ‘’Online shopping is becoming more popular than ever, and by 2021, e-commerce sales are expected to reach 17.5 percent of retail sales worldwide.’’ The e-commerce business has sparked a revolution in the way prospects can view or even reach out to find their needs. Due to the rise of such a convenient platform, the rise in advanced online payment and moe other factors have been witnessed.
Going digital is one of the most convenient and easy solutions for any business owner who is looking to walk with their prospects, satisfy them and help them find their needs much more closely and with e-commerce booming with the recent years, we are sure its benefits are here to explain why it is the greatest miracle of the 2020 era.
Why E-commerce is a huge hit in the business industry?
1. Lesser expenditure, more selling activities You don’t need to purchase a fancy office, a million-dollar furniture or even have to waste your money on unnecessary maintenance cost because for an e-commerce business all you need is a great website which has a pleasant and appealing image to capture attention, great attractive content and good customer support. Plus today your buyers prefer a business that delivers exceptional mobile experience because today’s generation believes, if it’s not trending on their smartphone, it’s not trending at all. ‘’In Q1 2019, Smartphones Accounted for 65 Percent of Retail Site Visits Worldwide’’. E-commerce helps businesses to focus more on the spending of money on higher engagement with prospects, higher outreach of the products being sold and the most obvious creating a better user engagement for prospects to shop as they like.
2. Creating a wider market When did you last visit a local store? Was it because you saw discounts or you were in the hope that the product you wanted last week has been restocked? This is another major drawback of local stores. They either don’t have great things to look at or are always out of stock and prospects today don’t like that. In business, if a prospect is unhappy for you for even the slightest reason, you are aware that that the prospect may doubt its presence with your business. But this isn’t the case with e-commerce.
The e-commerce industry has opened a huge market, in fact, a global market where anyone can buy anything they like without any location or preference restrictions. For instance, sitting in the UK you can still purchase anything you like from Australia or even Japan without any hassles. How cool is that? If your favourite physical store doesn’t the product you are looking for, you know where you need to find it…
3. Suits every buyer requirements Now your user isn’t going to shop between 9 am to 6 pm each day will they just like how a local store is. The main point to understand here is that your buyers are busy and whenever they get free time to relax they would like to shop. But in the case of local stores, this is highly impossible because what if your buyers get fee at 12 am or 3 am in the night? This isn’t the case with e-commerce. The e-commerce market is open all day every day. For instance, buyers can easily come online anytime they want even at 2 am in the morning and see what they like and go on to purchase their needs immediately. How cool is that? No waiting in the long queues and no person annoying them to check out other things.
4 . Increase your product sales So for instance, if you have a product which is bought by many of your buyers, that product can be easily be displayed as ‘Bestsellers’. What this action does here is that it attracts a lot of attention and buzz. See it in this way, would you rather pick up a product which has a good number of reviews or a product which has maybe just 1 or 2 reviews about, you would obviously go for the first one. This is also an advantage for e-commerce business owners because they can increase their product sales with the best selling solution they offer whilst exhibiting their remaining one. For instance, say XYZ company has a jacket which has become a bestseller, the brand can then attach a scarf or boots to go with it which compels prospects to visit the page and get a glance of the product. There are chances or you could say possibilities where prospects would end up purchasing both.
5 . A great way to capture prospects without any hassles To garner or rather to attract prospects from the competition taking place in the market is tough. You need to go out of your way to catch prospect attention so that through the competitive crowd they witness your product. It may seem difficult with physical stores but not with e-commerce businesses. With such a business you can easily launch new offers, advertise it and showcase it to your prospects as and when they come online. Have you noticed that whenever you use any online app you tend to find these offers, and low prices pop-ups? That is a great strategy that makes prospects to click on the ad and come to the e-commerce business owners website.
6 .Nurture prospects better Another great advantage of e-commerce business is the opportunity to engage with their prospects be it a one time buyer or a two. When a buyer signs up to purchase a product, they always tend to give their contact numbers, address, and email ids. This helps e-commerce business owners to get back to them. For instance, sending discount emails, helpful blogs, coupons, vouchers and every other thing that would make prospects visit their website again. In business, the more you engage with prospects, the faster and easier can you convert them into loyal leads which could add huge value to your business growth.
7. Receive only organic and genuine buyers
The online world has its cons due to the growth of hackers but at the same time, it also has its cons. In e-commerce, the buyers who a business deals with are more genuine and real. They are the buyers who are happy with their first online experience and would like to come back for more. They understand that what your brand offers wouldn’t be available anywhere else and that’s why they come back for me. Through word of mouth, they also act as referrals and spread the word about your business. Buyers like these are genuine and real.
While all the above have proved how an e-commerce business can grow better, there is one factor which determines all these benefits, the pricing factor. As mentioned above, while all these benefits illustrated above have spoken why e-commerce is successful today, pricing is one such factor which determines how e-commerce became a hit and still continues to do so.
‘’You spend all that time, energy, and money developing your product and in the end, pricing is the only means that you can use to convey all of your efforts, like an exchange rate. Yet, in many companies, pricing is overlooked or just guessed at. Don’t shortchange your efforts developing and producing your product by ineffectively pricing it; put some real thought into how much value you think you’ve created for your customers. ‘’
Why Pricing matters in an e-commerce business?
1 . Provides expected profits in return
The greatest reason to take pricing seriously in an e-commerce business is that it helps to derive a good number of profits. Investing in good website design, product packaging, product creation, manufacturing charges and other charges all accommodate a lot of expenses from the owner's end. The only way the owner can receive it back is through the form of profits. Pricing is important in e-commerce because it helps to receive valuable profits that e-commerce business owners can utilize to plan out other extra efforts to grow their business better.
2 . Gives a fair and transparent selling price
In e-commerce if you are going to charge a lot for just one product or if you will charge lesser for another product, chances are your prospects may start to develop doubt in their purchasing decision with you. In e-commerce pricing matters because at the end of the day prospects want to invest in their needs from a business who adds value to it. No prospect would spend too little or too much on a product without understanding the right value it holds hence in e-commerce pricing can play a huge role in either convincing or altering a prospect's purchasing decision.
3. Tackling competitors
Yes, pricing helps you do that. It speaks on behalf of your business in terms of quality, experience, and value. The competition is getting fierce, in fact, it is growing much faster in recent years and by the time you finish reading this article, already a good number of competitors would have been added to the list. Hence in order to sustain, or in order to grow despite the tough peers you hold, setting a price that screams of the right values and experiences your prospects are looking for would be ideal which is exactly you need to start analysing competitor price tracking. Remember in a business, all that matters is who you are fulfilling your prospects needs and if you are going to sell to them a solution you know for a fact that it will benefit them and it is the ideal one amongst the crowd, you create pricing which covers all of that.
Understanding this right now, how can an e-commerce business owner like you help to identify and create the ideal pricing strategy?
How web scraping can help to conduct efficient competitor price tracking?
Before we jump into the context let’s get one thing clear. The only way your business can grow better online or rather the only way you can create a successful pricing strategy is by digging through what your competitors are doing.
Sounds crazy? It gets even better.
See it in this way, why do you want to create a good pricing strategy? The obvious answer is to tackle your competitors, and how will you do that when you know your competitors will safeguard all their information online with strict measures?
With technology developing, they have also developed a unique solution to help solve such problems for e-commerce business owners like you via web scraping. Web scraping is the process of extracting data from any website or other sources of information which then gets saved in your system so that the user can monitor the data easily.
So if you conduct web scraping on your competitor's page, you will be able to conduct the following:
- Trace their pricing strategies
- Improvise on your current pricing strategies
- Create a better pricing pattern which adds value
Monitor their pricing patterns to understand what makes them higher than you and applying that with a better solution
What the results would be with web scraping?:
- A healthier brand growth
- More prospect growth
- Better prospect capture
- Reasonable pricing strategy framework created
- Receiving profits the genuine way
- Increase in sales and conversion rates
- Quicker business success rate growth
Web scraping can easily help you to scrape every minute detail of your competitors anytime and anywhere including the main agenda of this topic, competitor price tracking . In fact, there is a possibility that e-commerce business owners even hire data scientists to conduct such predictions on pricing so that the business can develop such a pricing pattern which will enhance their current solution and be effective in the near future but due to lack of data they fall short in the research.
But with web scraping, one doesn’t need to worry about anything. There are applications available in the market that help to conduct automated web scraping so that you can regularly receive updates on your competitor pricing tactics. As mentioned earlier, the competition is increasing in the -commerce industry, new and more new vendors are making their way to sell unique solutions to prospects and so to web scrape all of them could lead to a problem with your account being detected as spam or suspicious activity, Hence to avoid that, the ideal solution would be to conduct this action with a proxy server.
How proxy servers can help in efficient competitor pricing tracking with web scraping?
A proxy server acts as a mediator between a user and the website it wants to access. For instance say you want to access your competitor's price page, you will send a request to view it, that request instead of reaching your competitor, it will reach the proxy server who will, in turn, change your IP address and then send the request to your competitor. Once your competitor approves of the request you can view the information as well.
What happens here is you can use web scraping to view your competitor pricing page. For instance, when you scrape so much information at once, your activity can be considered as spam hence conducting a web scraping with proxy servers can put such kinds of mishaps to rest.
With the data now available in hand, it has become easier to plan effective pricing strategies.
Factors to be considered when creating pricing strategies
1. Covering every cost associated practices When you sell a product there are a lot of factors that require your attention, for instance, the manufacturing cost, the packaging cost, printing cost, labour cost and much more. With the money invested, it is necessary that all such costs need to be covered. So when a product is being sold the amount received for each sale should be sufficient enough to cater to all such costs as well as give you the benefits of receiving profits.
2. Target return pricing There are many products that help brands to receive a good amount of return which enhances and grows their brand on the profit chart. For instance, out of the products you sell, there will be a few such products which spark a lot of attention and hence investing in it by advertising it more can help you receive some good returns. Hence considering this pricing option too is essential when planning your pricing strategies. For instance, say if a product is priced at $80 you can receive a good target return of at least 30%.
3. Value-based pricing Have you noticed how your competitors use emotions when displaying their products online? That technique is what you need to start applying. Value-based pricing should be another essential factor that needs to be applied when planning your pricing strategies. With value-based pricing, you can use statements along with images that could connect with your prospects. For example, the brand Under Armour states in one of its advertisements when selling jackets as ‘ Stays warmer longer’. So in this ad, you can easily see the value being added and hence the next action would be to purchase it no matter the amount priced since the value-added covers the product as a whole.
4 . Competitor pricing This is another factor that needs to be kept in mind when planning pricing strategies. Your prices can’t be either too little or too much when compared to one competitor. For instance, you can’t charge $7 to your prospects just because your competitors are pricing theirs at $8. What you need to do here is to first analyze all your competitor's pricing patterns, keep an account of the pricing tactics each competitor is using and according to that, you can easily create a better pricing strategy.
5. Understand the market Another factor to keep in mind when deciding to price is the market conditions. You need to be aware that the market keeps fluctuating and with the growth in technology, change in trends and preferences takes place too. This is exactly why understanding market conditions are necessary to set your pricing strategies. When you have a clear understanding of the competitive market, you are able to retrieve quality information such as what your prospects are expecting, how much is the cost for the resources or raw materials, what are the other taxes that need to be paid and much more. This all influences the way you will set your pricing plans.
6. Understand your prospects
Another key factor that makes an impact on pricing is the prospect's opinion. When you decide the pricing you need to also walk in your prospect's shoes. For instance, shape your pricing patterns on the below questions:
- Is the price too much for prospects?
- Is the price too less for prospects?
- Does the price help prospects to see the value of the product?
- What would prospects think when they first witness the price?
When you are able to understand what your prospects are looking for, what do they believe an ideal pricing factor looks like, this all can help you to create a pricing pattern which will be accepted by all.
Since you are now aware of what the pricing factors hold, it’s time to begin the process of setting the right pricing pattern.
How to create a better price tracking strategy for E-commerce than your competitors?
‘’Pricing is the most critical component to maximizing your revenue. Harvard studies have found that a 1% improvement in your pricing can add up to 11% to your profits. With bad pricing, you’re missing out on profits in every transaction that you make.’’
1. Apply competitive pricing information When you are creating a price for your product, there is one thing you need to consider, it should add value to what you are selling to prospects. The best way to determine what exact and ideal price you should be placing is through understanding what your peers are doing which includes competitor price tracking as well. Just as it is mentioned above, easy solutions such as web scraping and proxy servers can be helpful in conducting competitor price tracking so that with the information being provided you can easily create an ideal price for your products.
2. Keep switching prices for your products As mentioned earlier the market keeps changing and maybe if a product was being sold for less and now suddenly the demand increases where you have to increase the prices, don’t worry about it. It is not mandatory for you to change all your product prices. You can easily set prices for your products under the following conditions:
- If the demand for the product has increased
- If the product is considered as the bestseller
- If the product is one of the highest selling one in your list
All of the above influences the way you will frame your pricing which is exactly why they need to be treated on priority. When you have even one product which is increasing high revenue for you, take that as an opportunity to modify the pricing patterns which will help you to receive good revenue in return.
3. Pricing models Another way you can create the ideal pricing factor for your products by considering the right model for them. For instance, you could lessen your product price and sell them in bulk so when your prospects see it it would be like they are paying a good amount for the products they are receiving in return. Another example could be to create prices on the basis of how your prospects think, for instance, you could place a price where the difference between the two products could be just $2 less or more so when your prospects see it they either will choose the least price one or will buy both since two prices don’t have much difference. Another pricing model could be when you create a price that is high amongst an environment where either the competition is none or too low. For instance, small businesses can sell their product for $28 and prospects would buy it because they would either consider it as a good deal or would understand that there are fewer businesses that sell such a solution.
4. Informing about the price hike Another way to create an ideal price is by communicating the same to your prospects. Say you were selling a product for $34 and now you have to sell it for $40, you need to offer an explanation for your prospects. At times prospects don’t hesitate to continue purchasing from a brand who increases their price all because they find their explanation valid. Say due to the high demand or the market condition, you have hiked a product price when you put it across to your prospects, chances are a few of them would still take the opportunity to spend on the new price. Hence when creating the ideal price keep this in mind, that you are catering to all the factors when deciding your pricing pattern.
5. Add value to the solution being offered If your prospects don’t find any value in the solution being offered, they would be doubtful to even consider buying from you. Hence it is important that when you are creating the ideal price you ensure that gives us a reasonable explanation for setting such a price. For instance, say if you are selling your product for $90 you will need to represent the following explanations:
- Why is this price kept?
- What is the value associated with it?
- How can it help prospects?
- Is it applicable to satisfy the long term need of prospects
All of the above will influence the decision when you plan your pricing solutions so it is wiser to consider them all with high priority.
6. Understand why you are setting a price The next thing to consider when setting a price is what’s the actual reason for your action. For instance, the following questions can help you receive some clarity:
- Why are you setting such a price?
- Are you looking for an increase in revenue with this pricing?
- Why are you finalizing this price?
- Are you looking to tackle your competitors with this pricing?
- What do you wish to receive back when you set such a price?
Answering the above questions gives you clarity on understanding how your pricing should be set up.
7. Underpricing Creating a price which is lower may get you thinking that it is a great way to capture your prospect's attention because who doesn’t like low prices? But the catch here is that setting up such a pricing strategy may not work in your favour. Prospects don’t look at a brand in a good way when they find their prices very less for the obvious reasons that it sounds cheap and gives them the impression that maybe the quality of the product is not up to the mark. Hence it is essential to set pricing according to the above factors mentioned in the article or according to what your prospects would like to be set as.
8. Overpricing While underpricing faces harsh criticisms it is also the overpricing of products that are in a similar situation. If you're going to price your product high, prospects might take a step back. It would be either because the pricing was too expensive or was not matching up to the value being offered. Hence to avoid such mishaps, it would be great if you take the suggestions of what the market conditions are and also of your prospects to analyze what prices would they look upon to make their purchase decision.
9 .Business priorities
Another factor that needs to be considered while setting up the price of your product is your business needs. Your business accommodates everything, right from the cost of the resources to the manufacturing costs and also every other minute expense that indulges in making your product better. So when you set up your pricing solutions you need to take all of this into account so that you are able to cover up all the costs and receive quality profits in return. The main aim of any business is to cover all the costs being made in order to create a product which is the ideal solution for prospects and so when you plan to sell that very product you need to frame the price in such a way where the profits you receive are worth all the effort invested.
10. Monitoring pricing activities
Another way where you can easily create your pricing actions is to always keep a closer check on what's happening in the market. In fact, you can keep a closer look at web scraping where you can extract all the information about the economy, market conditions, competitor actions and much more. When you have such information in hand, it becomes a lot easier to keep a closer check on the pricing patterns so that you can work and improvise on setting it up, Always remember that pricing matters and it can influence the selling decisions of your prospects.
Since you now have the closures required to create an ideal pricing strategy, let’s help you understand the tools you can use to conduct such an action efficiently.
Tools for competitor pricing tracking
1 . Agenty
A competitor price monitoring tool that operates round the clock using a cloud-based technology which helps to track down all your competitor's information including pricing so that a brand’s revenue can be impacted with insightful pricing strategies. This service by Agenty is available for any brand to conduct such action from any competitor's website they like, no matter the location.
Brandwatch is another competitor analysis tool where it focuses on helping brands to improve their performance. With the data being provided it becomes easier to drive insightful information which can help any brand to walk in the right direction towards enhancing their brand better.
- Measures activities
- Gives a clearer insight into brand perception
- Enforces sentiment strategy
The Bottom Line…
For a business to be successful the main way it needs to climb the ladder of success is through understanding what its competitors are doing. When a brand is able to understand what their competitor's strategies are, it becomes easier to enhance and grow a brand in a much better way than the competitors have in mind.
Pricing is important and it will continue to remain one of the biggest factors when it comes to capturing prospect attention towards the purchase. With the solutions mentioned above, always ensure that you use a good web scraping tool that conducts its action quicker and better and also invests in a good proxy server that is capable of securing the web scraping activities being conducted by you.
Did you find the article insightful? What did you think of the solutions mentioned in the article? We would like to hear your opinion on the same.