Are you pricing effectively to engage your customers?
In the digital age the one-size-fits-all pricing strategy is obsolete. E-retailers need a dynamic pricing process, customized for each customer…just in time.
The ability to change prices instantly in response to market fluctuations is gaining a foothold in the e-commerce sector. Implementing dynamic pricing is not complicated… with the right technology. Integrating existing e-commerce and sales support systems with dynamic pricing allows companies to measure their customers’ buying behaviors and set prices accordingly: the benefits are significant.
Dynamic pricing is neither new nor untested. Many industries have used dynamic pricing with great success. Pricing for goods or services can be tailored depending on a customer’s physical location or preferences, frequent usage, special promotions or specific site discounts.
Demand information could be customer-specific information, like how much has the customer spent in the past, or on the current purchase, but it could also incorporate competitive information, such as the price that a competitor is offering right now.
Retail Express Dynamic Pricing can be used to calculate prices depending on many variables, enabling a business to respond on a real-time basis to supply-and-demand information. For example we can derive relationships between “item impressions” and “item conversions” to determine the conversion ratio and in addition define rules that adjust prices based on the conversion rate.
The reality is that most products are differentiated in some way other than price and it’s unlikely that two retailers will have identical purchasing or transportation costs or inventory availability. That is why it’s imperative that each company should have its own individual pricing strategies even when competing in the same market.
The internet makes it easy for retailers to set pricing strategies in which a business sets the price of its product and service offerings the same or lower than its competitors. A follow-the-leader price strategy can lead to a spiral of either rising or lowering of prices. The competitor may in turn choose to counter this strategy by continually raising and lowering prices to make matching difficult. In most markets retailers end up selling the same quantity while the quantity sold remains the same, the lower price will result in less profit for all the firms.
Retail Express can use a wide variety of data to drive your pricing needs, if you are able to provide real time feeds of this captured data you can use it to automatically invoke your pre-defined rules stored in the pricing execution engine.
The most obvious benefits to using dynamic pricing to price a company’s products or services is that businesses can maximize return per customer by providing customized pricing for different market segments.
The real time gathering of market intelligence enables e-retailers to provide consumers what they want at prices they’re willing to pay
All companies compete with each other for a consumer’s business. With the technology of the Internet, e-retailers’ products and services are even easier to compare and that makes a company’s ability to react to actual customer demand and/or price sensitivity of paramount importance.
Manual monitoring of competitor prices and price changing is a time consuming process for a retailer.
With dynamic pricing, companies can devote a lot less attention to continuously monitoring the marketplace and be confident that Retail Express’ system will automatically react and change prices in response to market conditions which may be more than just competitor activity.
Pricing has become personal, not just for preferred repeat customers, but for every consumer to buy at the price he/she is willing to pay.
Retail Express provides users with graphical visibility of past and future performance data as well as functionality to automatically price goods and services through all channels concurrently and therefore makes it easier for merchandizers to understand the fluctuating impact of these multiple strategies. As Peter Drucker, said “You can’t manage what you can’t measure.”