Price Intelligence for the Rapidly Changing Market
The amount of data in retail is growing every day. It includes internal data about sales, promotions, and stocks, as well as competitive data regarding prices and other market changes.
To make this data eligible for market analysis, your company needs to collect it properly from all available sources, then clean and structure every data point. However, you will likely need to collect unstructured data from different sources. This makes it difficult to use the data for price intelligence or to create a successful pricing strategy.
One of the biggest challenges is to analyze data and obtain necessary insights in order to compete in the constantly changing retail market. Insights regarding repricing, promotional activities or assortment can transform your business into a retail winner if analyzed correctly.
Statistics is stubborn: it uses the power of numbers to show the importance of the right pricing in retail.
|60% of shoppers choose the retailer with the “optimal” price (PWC)||12,000 of retailers (mostly in the US and the EU) from different industries which manage over 1.6 million stores||71% of in-store shoppers who use smartphones for research say that it has become an important part of the experience (Google)|
It is important to transform the daily search and analysis of market opportunities into an organized and manageable process consisting of a minimum number of routine tasks. To do that, retailers need to select a solution which will do these tasks for them.
Price Intelligence Software: rich choice, scarce value
An in-house price intelligence solution is expensive to develop and maintain. Retailers who value their time and resources usually use a SaaS solution for their price intelligence needs. A cloud-based software ensures a quick and seamless integration with the retailer’s internal system and allows you to have a flexible pricing strategy by expanding or narrowing the set of functions.
There are many price intelligence software providers on the market, which can make choosing the right one for your company difficult. A non-comprehensive research across relevant listings shows over 370 different software providers. There are solutions which focus on data collection, while there are those which help retailers interpret the data and make the right decisions.
Online competitive intelligence tool has to have the following features:
The price intelligence software you choose should be able to collect data from various sources and different providers. Additionally, you should have the option to store historical data in the internal ERP and export it in .xls reports, while an external provider delivers competitive data on pricing, promotions, and products in stock via API.
Price intelligence software should also be able to structure dis-aggregated data and stores it in one place. Your company should receive permanent access to the history of price changes, efficiency analysis of selected strategies, and promotional activity. A recently hired analyst can use the pricing history for a given period to test pricing assumptions without needing to consult the IT department.
Reports should be customizable for different retail teams (Category Managers, analysts, and executives) and accessible through visual dashboards or email.
Software processes should have the ability to collect data to illustrate the efficiency of your company’s current operations, as well as the abnormalities and opportunities of the market. The platform should show you new market opportunities which you can use to achieve your business goals. The only thing the Category Manager should have to do is make the final decision about repricing.
Customizable notifications about significant market changes should be available to you so you can respond in a timely manner. There are multiple notification formats to consider:
- For a Category Manager — about competitive repricing,
- For a Marketing Manager — about new promotions run by competitors,
- For an Analyst — about inefficient pricing strategies,
- For a Vendor — about violations in the market positioning.
How to Choose a PI tool
Step 1: Make a shortlist of the most relevant software providers.
Step 2: Launch a pilot. Your team needs to observe the software in operation to choose the right option according to what functions are most important to your business. Additional functions which will never be touched will complicate your ability to use the software, and will also be an unnecessary additional expense.
Step 3: Choose the best software and make a contract. Outline all the usage rules, criteria for data integrity and the penalty if the software provider fails to fulfill the obligations.
It is crucial that the retailer-provider agreement contains additional points covering the following:
- the criteria for data quality and delivery
- all the reports are accessible to the user
- reports can be customized and optimized
The main goal of price intelligence software is to increase revenue by optimizing pricing. This consideration should determine which software you purchase and how you integrate it into your pricing process. The right software for your company is out there; with the aforementioned guidelines, you should be able to choose the best provider for your company’s needs and enhance your pricing strategy as a result.