Are you making price changes, but not achieving desired sales?
Today, consumers are equipped with more technology and resources than ever to readily access the vast amount of pricing information out there. Before making any purchase, consumers are almost guaranteed to search for multiple similar websites that carry the products you sell. And if they find a price more competitive than yours, it’s obvious that you could lose sales and loyal consumers.
Using Competitive Pricing Software is mandatory for retailers to understand competitive trends, do dynamic pricing and maintain sales.
Most retailers are aware of this. And to remain competitive, they use Pricing Technologies that help them gain a competitive edge. The key tactic is to look at Competitors’ Price first. With this data, a retailer can use dynamic pricing to offer a better deal to its customers. Even offering $0.01 lower than the competitor will have a better chance of winning sales.
How often should you change your product prices?
Your price changes can happen anywhere from monthly, bi-monthly, weekly, bi-weekly or daily. If the industry you sell in is highly competitive and your competitors choose dynamic pricing, it’s quite clear that your sales will be impacted unless you are competitive enough and keeping up with these changes. And to be competitive enough, it’s wise to ask: how often do I need to change my prices?
What revenue impact did we see?
A leading retailer in Sporting Goods approached us for Price Intelligence Solutions after facing fierce competition and high price volatility in their market.
The retailer made our price change recommendation once every 30 days (or monthly).
Sales for the updated prices grew on average 36% within the first 10 days following each price change. However, from days 10 through days 30 before the next refresh, sales declined consistently. This demonstrated the importance of making price changes more frequently to remain competitive.
If you are wondering why your sales isn’t getting impact despite making price changes, the frequency of price change may be a reason. Keeping prices flat when competitors are pricing dynamically is a bad strategy. To stay ahead, you must change prices as required by the market — especially in a highly price competitive category.
We recommend you remain competitive, track your top competitors and make price changes intelligently at frequency of your competitive set. If your competitor changes price twice a day, you should at least change it daily, if not more. However, we understand there is a fine line and you don’t want to overdo it as making intra-day price changes can give price change fatigue to your customers who purchase directly from you vs on marketplaces like Amazon.
When making price changes, do not ignore your Profit Margins. You must track your costs and not go below floor price, even if your competitors do. This is counterproductive. If you want the same level of success our existing client is achieving, sign up here for free.