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 external, or competitive, data about prices and other market changes.
To make this data eligible for market analysis, a retailer needs to collect it properly from all available sources, and then clean and structure every data point. However, most retailers collect unstructured data from different sources. Therefore, it is difficult to use such data for price intelligence or to create a winning pricing strategy.
Retailers’ biggest challenge is to analyze data and obtain insights which they use to compete in the constantly changing market. The insights usually cover repricing, promotional activities or assortment: every one of these can transform a business into a retail winner if arranged 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 then maintain. Retailers who value their time and resources use a SaaS solution to solve the same task: a cloud-based software ensures a quick and seamless integration with the retailer’s internal system and allows being flexible in price management by expanding or narrowing the set of functions. It is hard to choose the right solution since there are many of them. A non-comprehensive research across relevant listings shows over 370 solutions to manage prices. There are solutions which focus on data collection, while there are those which help retailers interpret the data and make the right decisions. Businesses need to choose wisely: the perfect PI solution has to comprise the maximum number of functions necessary for retailers.
Online competitive intelligence tool has to have the following features:
Competera Price Intelligence solution collects data from various sources and different providers. Retailers 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
The price intelligence software structures disaggregated data and stores it in one place. Retailers 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 engaging IT department.
Reports can be customized for different retail teams (Category Managers, analysts, and executives) and accessed through visual dashboards or email.
One of Competera’s reports for example — the price index — maps the retailer’s position on the market, shows how the market dynamics affects sales and delivers data on competitive prices, promotions and stock availability.
Software processes collected data to illustrate the efficiency of the retailer’s current operations, as well as the abnormalities and opportunities of the market. The dashboard shows new market opportunities, which the retailer can use to achieve business goals. The only thing the Category Manager has to do is to make a decision about repricing.
Customizable notifications about significant market changes. Retailers can choose any notification format they consider the most suitable:
- 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: Use the above list to make a shortlist of the most relevant solutions.
Step 2: Launch a pilot. The retailer’s team has to observe the solution in operation to choose the right option which covers exactly the functions important to the business. Using a spaceship for the tasks which a jet can do is a waste: additional functions which will never be touched will complicate the life of the retailer (including its financial aspects).
Step 3:Choose the winner and close the deal. Outline all the usage rules, criteria for data integrity and the penalty for the failure to fulfill the obligations.
Retailers should remember that the main goal of this solution is to increase revenue by optimizing pricing. This consideration has to drive the choice of the solution and its integration.
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