The price tag as we know it is becoming more obsolete every day. With more and more entrants entering the retail industry, retailers are finding more ways to stay competitive and win over customers. One of the main ways retailers have chosen to compete is on their price offerings. Price is a huge influencer for shoppers when they’re looking to buy something online, and with competitors a mere click away it’s important to be the most competitive seller.
To avoid being left behind by retail giants like Best Buy and Amazon, many retailers have turned to repricing to keep up and even get ahead of their competitors. There are three main ways to reprice your products, and we’re here to discuss each of them in detail, so that you can learn which one will work best for your business.
Manual repricing entails searching your competitors’ websites to gather price points for the items you carry, and manually pushing those price changes onto your webstore. It provides the seller with pricing control, and lets them be completely aware of what’s happening in their marketplace.
However, manual repricing is really only going to help a retailer whose SKU count is minimal. If you carry thousands of different products, manual repricing can be a tedious task that leaves plenty of room for human error. If you are looking to greatly expand your business and are currently repricing manually, you may want to look for a system to automate the process.
This is where automated tools come into play. If you are a large seller with lots of inventory overlap with your competitors, an automated repricing tool is going to be the easiest way for you to reprice your products. A rule-based repricing method will let the retailer change their prices according to a set of rules established by themselves, e.g., “one cent below competitor” or “one dollar above lowest competitor.” It’s fast, and not nearly as time consuming as manual repricing.
Rule-based repricing isn’t completely automated, however. It’s up to the retailer to study their own pricing patterns and strategy to help them learn which price is optimal for their products. It can take the retailer a lot of trial and error to find the rule that works best for their business, which can get tedious over time.
Retailers that use algorithms to reprice their products find the most competitive and profitable price. Algorithms take more than just pricing into account. Competitor stock levels, overall demand, and more go into account when determining the right price for your product. It’s completely automated, and will find the sweet spot in your prices that maximize sales.
Sometimes, algorithms require a bit of time before they can find the most accurate results for your prices. Algorithms are designed to learn on their own, so they will test different price points until you’re golden. The results may not be completely immediate, but they will constantly change to help you maximize your margins.
Static pricing is quickly becoming a thing of the past in online retail. As more retailers gain access to customer and competitor data, the industry will become more competitive and repricing will become a necessity to compete. Regardless of your size, you should consider repricing in your selling strategy and give one of these methods a shot.