In the world of online retail, being able to adapt quickly to changing market conditions is key to staying competitive and maximizing profits. One of the most important tools eCommerce businesses have at their disposal is price tracking software. By regularly monitoring and analyzing pricing data, companies can identify opportunities, avoid pitfalls, and make smart decisions that directly impact their bottom line.
This article will explore what exactly price tracking is, why it’s so critical for the success of eCommerce businesses, and how you can start leveraging pricing data to boost your online sales.
What is Price Tracking?
Price tracking refers to the practice of systematically gathering and analyzing pricing data for your products as well as your competitors’ products over time. This includes monitoring changes in wholesale costs, retail prices, discounts, promotions and more.
Specialized software, often in the form of competitive pricing tools, automates the collection of this data from various sources, allowing for efficient and consistent tracking across product categories and competitor websites. These tools then provide insights through visual dashboards and reports to help inform pricing strategy decisions.
Armed with clear pricing analytics, eCommerce managers can easily spot lucrative opportunities for driving higher margins, react faster to undercut competitor price drops to retain customers, optimize price points to maximize sales, and more.
Why is Price Tracking Important for eCommerce?
There are several key reasons why consistent price tracking should be an integral part of any eCommerce business strategy:
Optimize Profit Margins
With pricing analytics, you can determine ideal price points for maximizing profit margins on all products while remaining competitive. This level of pricing intelligence is hugely valuable, especially for merchants selling across multiple channels.
React Quickly to Market Fluctuations
Sudden changes in production costs, competitor pricing activities, demand forecasts, and other external factors can greatly impact online retail. Price tracking allows merchants to respond rapidly to price drops from rivals or spikes in wholesale costs by making informed decisions.
Understand Customer Price Sensitivity
Granular pricing data helps merchants understand how demand fluctuates at different price points. This supports pricing decisions tailored to customer segments that drive higher sales volumes.
Take Advantage of Competitor Price Changes
When rivals increase prices or reduce promotional discounts, it presents an opportunity to sweep up those dissatisfied customers by holding or lowering your own prices. Price tracking facilitates this competitive response.
Inform Discount and Promotion Planning
Planning seasonal promotions and online sales is guesswork without solid pricing intelligence. Price tracking provides historical data on promotional performance and insights into how discounts affect profitability.
As you can see, there are compelling benefits to leveraging price tracking across key eCommerce operations, from informing pricing decisions to fueling marketing campaigns. The result is sustained profitability and competitive advantage.
Real-World Examples of Price Tracking in Action
To really drive home the business impact price tracking delivers, let’s look at some real-world examples.
Walmart Uses Price Tracking to Beat Amazon
Retail giants Walmart and Amazon are constantly fighting for eCommerce domination and customer loyalty. This competition has led both companies to invest heavily in pricing analytics.
Walmart has developed advanced price tracking and intelligence capabilities they use to match or undercut product prices listed on Amazon systematically. By scraping data from Amazon and responding in near real-time with equal or lower pricing, Walmart seeks to position itself as the low-price leader.
This price tracking and cost management strategy has helped Walmart chip away at Amazon’s market share while improving profit margins on high-volume items.
Implementing Price Tracking for eCommerce Success
Convinced your eCommerce business could benefit from price tracking? Let’s explore the steps to effectively build or select a solution tailored to your operations.
- Determine business goals – Outline specific business goals you want to achieve, such as increasing average order value, matching competitor discounts, maintaining price consistency across channels, etc. These metrics will drive software requirements.
- Audit pricing processes – Take stock of your current pricing practices across departments to identify areas for improvement a price tracking solution can address.
- Build in-house or buy third-party? – Developing robust price tracking capabilities in-house requires significant development resources. Purchasing an end-to-end SaaS platform is often the faster, more cost-effective route.
- Select feature set – Must-have features include competitor price monitoring, historical data, adjustable alerts, API connections to other software tools, and custom reporting. Scalable solutions easily manage tracking across a high volume of SKUs.
- Integrate with eCommerce platform – To enable dynamic pricing, integrate the price tracking solution with your eCommerce platform’s backend pricing engine. This automatically syncs adjusted prices.
- Analyze and optimize – With price tracking activated, run tests, analyze performance data, identify new opportunities and continue optimizing pricing for increased profits.
Conclusion
From small pure-play eCommerce retailers to retail giants like Walmart and Amazon, price tracking and intelligence has become a non-negotiable tool for competing and succeeding in online sales.
By providing actionable pricing insights in real-time, price tracking empowers merchants to react faster, improve margins, drive higher conversions and deliver real value to customers.
Implementing an automated price-tracking solution tailored to your business goals and operations enables data-driven decisions that ultimately lead to growth and profits. The time to start tracking prices is now.