The importance of pricing strategies online
UK retailers lose roughly 1.97 million hours each week on competitor price checking. Maybe you’ve contributed to these hours yourself; endlessly trying to keep an eye on your competitors, whether online or physically crossing enemy lines and entering their shops!
Imagine how that time could be spent, if you had the right insight at your fingertips.
If you’re a retailer selling specific products that other online retailers may also be selling, how can you ensure that your offering is the one that consumers choose?
While the old paradigm of customers choosing a store and then building a basket of products in that store no longer holds true, retailers need to ensure they have the most enticing proposal.
This may not necessarily mean having the lowest price; a decision to purchase relies upon more than just pricing, for example, delivery time, customer service etc., all have their part to play. Having said that, pricing is an important pillar in any marketing strategy, especially online – one that retailers can’t afford to ignore.
Using data from our new Pi PricePoint reports, retailers can create a smarter online pricing strategy based on their specific business objectives.
Being Visible – Getting found online
Being found online is half the battle for retailers; if your site is not optimised to return for your products then your online revenue will suffer, even if your pricing is competitive.
With an overview and clear understanding of the search landscape, businesses can track their performance in relation to their competitors and identify growing trends in their sphere.
Search intelligence can reveal the products in your portfolio that take prime position online; thereby giving focus to your pricing strategy and increasing the likelihood of conversion.
The right pricing
Conversely, whilst a brand may have good visibility in search, if they have no grasp on competitive pricing strategies then their performance efforts could be futile.
Online searchers, more often than not, are willing to shop around for the right price online; in fact, according to a customer survey by Trustpilot, 62% of 8,000 respondents indicated that price was one of the most important aspects to take into consideration when purchasing a product.
So whilst you may have strong visibility in the SERPs, if your pricing is not compelling, you may not convert.
A smarter pricing strategy
A retailer wanting to get a better idea of…
- where it sits in the market with its pricing across its full product range
- why certain products sold at a higher conversion rate than others
- where the greatest opportunity is to increase margin and sales
…could rely on accurate, time efficient audits using price and search data.
We’ve tracked a well known clothing retailer’s online visibility for 1,000+ of their products and, using Pricesearcher data, tracked the pricing of these products across not only their own site, but all other online retailers selling the exact same products.
The chart below shows the retailer in question as ‘A’, with all other letters representing competitors. With ‘A’ in the middle of the chart, the distance from the centre is the difference in both price and visibility.
Price visibility quadrant
Using this weekly snapshot of the online market, retailer ‘A’ has a clear idea of how well it is positioned alongside its closest competitors. As we can see, ‘A’ has the most visibility for its products, and is on average, less expensive than the other websites for its matched products. In this situation, our retailer can identify its low risk competitors.
A retailer may also glean trade insight from this data. For example, if a competitor was selling the same products at a much lower price, retailer ‘A’ might make an intelligent assumption that this competitor is getting a better deal with their supplier. Could a better deal be negotiated with your supplier?
Increasing product visibility
Retailer ‘A’ may want to know how many exact matched products its competitors are selling, and therefore deduce who its main competitors are online. To achieve this, it can analyse its matched products and visibility.
Product matched competitors vs visibility
Retailer ‘A’s key competitor for organic conversion is revealed here; where both the product match and visibility is high. However, when the product match is strong but the visibility is low, the site represents little threat to organic conversion.
Supercharge your strategy
Successfully bringing consumers to your site and winning their custom can be achieved in numerous ways. Having visibility online and a reputable price are just parts of this puzzle, but undoubtedly very important parts. Pi PricePoint reports can provide the intelligence you need to inform your search and price strategy, and highlight the winning opportunities online; no other report gives you strategic insight on this level.