Retailers are prone to pricing errors. This is partly due to traditionally complex pricing in markets with many sellers with different information. The price you think is right may be completely wrong in the marketplace.
However, in today’s reality, shoppers who use online tools to find products are more likely to make a purchase at a lower price. According to TalkBusiness , inflated prices can lead to a drop in sales for a brand, as customers will refuse to buy from a store that is “too expensive.”
This is why you need a competitor price monitoring solution.
Manual price monitoring
Price monitoring, also known as “price research,” telemarketing data involves collecting data on all prices of your product in the market. In its simplest form, this type of competitor price monitoring can be done manually. This process is known as “manual price monitoring.”
Automation of the process
A more sophisticated approach to price monitoring involves the use of software and computer applications that automate routine work.
However, the subtle differences 5 landing page examples for your inbound marketing strategy between manual and automated approaches to price monitoring and the potential shortcomings of each system are not always obvious. For those who have not used automated solutions, it may be difficult to imagine that the entire process can be automated.
Let’s compare the two types of price monitoring so you can choose the one that suits you best.
Psychological Pricing
How to monitor prices manually
A typical manual price monitoring system taiwan data arises from a retailer’s perception of a need to research prices in a market. For example, a retailer with a large local market share faces new competition in the form of a newly opened store across the street. However, the new store may be targeting a different market segment, so there is no cause for concern.
Perhaps, over time, the new store will start selling the product that only the old seller offered. And then the first seller will realize the need to monitor the prices of another retailer for the common product, because otherwise all customers will prefer his competitor.
Manual Price Monitoring Features
As you can see, manual price monitoring systems arise as a result of arbitrary, spontaneous decisions and are therefore usually very simple.
At best, such systems consist of a spreadsheet to store data. Typically, the frequency of updates to the information in such a system is low. From time to time, the retailer makes purchases at a competitor’s store to find out the price level.
Potential disadvantages of this approach to price monitoring
As long as the number of products whose prices need to be monitored is small, there will be no problems. However, as the number of products to be monitored grows, certain difficulties arise. First, manually updating prices for several dozen products becomes quite a labor-intensive task.
Additionally, if there are more than two retailers competing in the same market, it will take longer to collect data for each of them.
Moreover, updating the data is becoming increasingly difficult. Competitors are constantly changing prices. As a result, the retailer has to spend more and more time constantly updating the price table.
How automatic price monitoring is carried out
In fact, most finished goods markets are much more complex and highly competitive than in the example discussed. Instead of a dozen prices and a handful of competitors, the seller has to monitor hundreds, thousands, and even more competitors.
Characteristics of the automatic price monitoring system
Retailers operating in highly competitive markets realize that manual price monitoring is too time-consuming. As a result, they may immediately invest in an automated price monitoring solution.
As a rule, automatic price monitoring systems have the following characteristics:
- Professionally developed software, characterized by a high level of security and data safety
- Can track prices of unlimited number of products
- Can track hundreds and possibly even thousands of competitors
Common misconceptions about this monitoring approach
Many retailers may be reluctant to consider an automated approach to price monitoring due to a lack of experience with existing tools. This is understandable.
However, sometimes retailers think that monitoring prices with spreadsheets is no different from using automated tools. They are partly right. However, the data in the spreadsheets can become hopelessly outdated or corrupted.
Automatic price monitoring allows you to significantly reduce the time it takes to update data on competitors’ prices.
Which approach to price monitoring is preferable?
Any rational retailer will prefer a price monitoring solution that avoids problems and saves time. We offer you a number of criteria that will help you finally decide on the type of price monitoring system.
Criteria
Retailers have little free time and are also looking to cut costs. These priorities need to be taken into account when choosing a competitor price monitoring system. You may also need a feature to find market opportunities for growth. Here is a short list of reasonable criteria for choosing a price monitoring solution:
- Time – requires minimal time for startup and maintenance
- Cost – Reduces both initial and maintenance costs
- Growth – identifies new market opportunities and drives business growth
Your choice: which solution will win?
If you have rated the solutions according to the list above, the final distribution of points most likely looks like this:
- Time – the automated system wins because monitoring prices with powerful software takes much less time.
- Cost – a draw between manual and automatic price monitoring. A manual price monitoring system can be developed for free. However, the maintenance costs of an automatic solution are lower, because you spend less time updating data in tables.
- Growth is the victory of automation. Automatic price monitoring allows you to find new products from competitors that you are not yet selling. As a result, you can add them to your assortment and attract new customers.
According to this assessment, an automatic price monitoring system turns out to be more profitable in the long term, unless, of course, you are working in a narrow niche in an extremely limited area.