Online Price Monitoring for Brands and Manufacturers
Online Retail Pricing Strategies for Brands
Competitive Online Price Monitoring for Brands
Managing Price and Promotions Across Online Stores
How Clavis Helps Brands Optimize Online Pricing and Promotions
The Internet, whether accessed at a desk, on a tablet while watching TV, or in the palm of a hand while in a brick-and-mortar store, gives consumers unparalleled power to quickly and easily compare prices and find promotions for the products they need and want. This technology-enabled online price monitoring and transparency is disrupting traditional retail and creating the need for brands to closely monitor price across their categories and retailers online.
Consumers have the ability to compare your products’ pricing against your competitors across online stores manually, or they can let comparison shopping engines do the work for them. Comparison shopping engines (CSEs) such as Google Shopping, Nextag, and PriceGrabber aggregate key product information (including price) onto a results page. Shoppers can click to navigate to the product page at the online store with the best offering, typically the store offering the lowest price.
When it comes to consumer motivation, price ranks second only to convenience. With the advent of the Internet, your product prices and promotions are fully transparent to shoppers. This means that shoppers have full visibility to your and your competition’s prices across retailers. Shoppers can also see how often your products (and other products in your category) are on promotion. Not offering the right price points in your category at online retailers will hit where it hurts – your brand integrity and your bottom line.
The information available within a few clicks or taps influences billions of dollars in sales across the world. In the US, 8% of all retail sales have moved online (US Census) and a whopping 64% of in-store sales are influenced by the digital channel (Deloitte), with shoppers checking product content, product ratings and reviews, and prices in advance of or during their shopping trip. In the UK shopper behavior is similar with 15% of sales occurring online and 50% of in-store sales being digitally influenced (Deloitte).
Your online retail pricing strategy can seek to maximize brand value, customer engagement, and results such as basket, sales, and margin. In an omnichannel landscape where shoppers have visibility into pricing across brands and retailers, as well as access to a variety of promotions, success doesn’t mean a race to the bottom. Pricing strategies must balance profitability, brand value, and consumer appeal.
A successful pricing strategy begins with a deep understand of your category, each of your channels, and your shoppers. Understanding what motivates and drives value perception for your key shoppers can help you determine the right mix of price and promotion for each of your online retailers.
However, one of the most important aspects to pricing optimization is conducting competitive analysis. Competitor price tracking of individual products can help you maximize your placement on the digital shelf. But comparing prices at the category and even the brand level can help you understand the competitive landscape at a higher level.
Competitive online price monitoring at the category level helps retailers understand where they have pricing power and can command a premium across different verticals. While one seller might be selling a laptop at a higher price, they might be more competitive in the electronics category as a whole. Brands can shape their value proposition by honing in on the items that matter most to shoppers. But comprehensive pricing strategies include pricing position not just by item, but category and channel as well. Investing in categories where your brands command a premium can continue growth even in highly competitive categories.
Another tactic is to test prices early and often on key items that can withstand price elasticities. Monitoring shopper response and tracking sales data can help you optimize price for item, category, channel, and geography. Additionally, where your brand has strong brand affinity and price position allows you to test related product offerings for cross-selling opportunities.
Brands that take a proactive approach to daily monitoring of product price and promotions and will be best positioned to protect the integrity of the brand and category, as well as drive sales both online and in stores. Measuring daily activity will allow your brand to optimize for value and profitability. Analyzing pricing activity will give you a deeper understanding of the pricing strategies and promotional mechanics at play in your category, and will enable you to partner with your key online retailers more effectively.
Armed with this knowledge, you can answer strategic questions that are key to brand and category success. For example: Is there a high level of price competition among retailers that may be damaging the perceived value of the category? Is promotional activity too frequent or discounts too deep, training consumers to wait for promotions to make their purchases? Both of these dynamics are damaging to the category, and brands should work with retailers to develop a strategic plan to protect the brand, category, and store by determining prices and promotions that are attractive to consumers while still delivering value and profits to manufacturers and stores.
Store by store, determine whether your products are priced correctly. If you have minimum advertised price agreements, ensure that online stores are compliant. Work with retailers to make sure your product price ladder is in place. Do your low, middle, and high tier products have the right price gaps? If products are priced correctly, do you have the right product mix available on your key online stores or are there additional items that would offer the right price points for each individual online?
Equally critical is to make sure that your prices are in line with those of you competition and that you are winning your fair share of promotions at online stores. Consumers are directly comparing prices at online stores, often sorting menu and search results by price, so it’s critical that your products are competitively priced compared to the rest of the category. With up to 25% of gross sales revenue feeding back into trade spend, it is essential for brands to actively manage promotions at online stores to justify and optimize that investment.
Align on the right price and annual promotional strategy with retailers to offer consumers value while maintaining price integrity for category and continue to monitor price and promotion activity to ensure retailer compliance to those agreements.
Our ecommerce intelligence platform allows brands to track pricing and promotions for their products as well as their competitor’s products. You can customize our platform to track observed price, difference from MSRP, and variance from MSRP. You can even be notified of price changes, violations, and promotional agreements across online retailers so that you can maintain your pricing strategy and make any necessary corrections.
In addition to tracking individual products, our pricing intelligence can be summarized by retailer, category, brand, and manufacturer to give you a complete view of the pricing landscape for you and your competitors.
To learn more about our price and promotions tracking and the rest of our ecommerce intelligence solutions, connect with us today.