Price monitoring, also termed price intelligence, is a cost analysis method that involves analyzing the historical and current variable prices of a business and its competitors to create an optimized pricing strategy.
Price intelligence is gathered by tracking prices and offers placed by sellers on different eCommerce websites such as Google Shopping, eBay, or Amazon. It also involves gathering pricing data such as shipping costs or the availability of products. With price monitoring solutions, companies don’t have to remain blind to the price changes happening in their industry.
Why do companies conduct price monitoring?
Online retailers are implementing thousands of price changes every day. And with the rising trend in dynamic pricing, we’re likely to notice these price changes more. It becomes essential for companies to track pricing data and set competitive prices. Price monitoring solutions have come in handy for companies searching for data to inform their pricing strategy in a dynamic market.
Here are the benefits of price monitoring:
- Understand the market situation
Price monitoring tools track both direct and indirect competitor prices. You could also set your application to track different factors affecting prices for a specified period. The information you gather gives you an in-depth understanding of the market situation.
- Track competitors prices
Price monitoring in Google shopping, Amazon, and other marketplaces unearths a wealth of pricing data for other businesses. You study your competitors’ prices, their sales priorities, shipping costs, availability of products, and others. Comparing prices from different sellers enables you to determine a suitable price to win a sizable market share. You could also study their promotional strategies and grab a few ideas for your business.
- Understand consumer preferences
Price monitoring involves tracking historical price changes and customer responses. By evaluating this historical data, a business can see trends that indicate consumer preferences.
- Identify opportunities for product differentiation
When tracking prices, it’s easy to determine a crowded market for a product or service. Overcrowding could result from an oversupply of a low-margin item. With this information, your team will decide whether to find ways to differentiate your product or focus on other profitable items to boost your profits.
- Notice when new sellers in your field join the market
Businesses need to beware of the changes affecting their fields. The changes include new entries that may shake things in the playing field. This means that new competitors don’t catch you unaware. With this intelligence, you can prepare in advance to compete adequately.
- Set competitive prices
By analyzing a business’s past prices and market trends, the team can reflect on its pricing strategy. Their findings after price analysis should guide them in creating the best pricing structure to maximize profit. Come up with prices that match the market situation and are competitive enough to gain more sales.
How Do Businesses Conduct Price Monitoring?
The traditional method of price monitoring involved visiting different shops in target locations and noting the prices of the products of interest. If shops sell these products online, you could also browse various e-commerce stores and record the data. You compile the information in a spreadsheet for analysis purposes.
As you can imagine, this method is hectic and time-consuming. Besides, market prices fluctuate rapidly. Businesses will find it impossible to keep track of the changes via these manual tactics. Manual methods are slow. The data is likely to become obsolete even before you begin processing it.
Google shopping has a price monitoring feature, but the company tailored it to customers who wish to compare prices and find products at a bargain. If you are a seller, Google shopping gives product tracking IDs, but you can’t use this to spy on other sellers. So, how do you do price monitoring in Google shopping and other marketplaces?
Price Monitoring Using Automated Methods
The current demand for quick collection and analysis of high volumes of pricing data calls for intelligent tools. That’s why your business should consider automated methods. Today, you’ll come across numerous price monitoring tools whose algorithms can gather a lot of data and process it quickly. They also collect this data for a wide assortment of products at one go. Unfortunately, these tools can be expensive, especially for startups.
A good price monitoring alternative would be scraping Google shopping. All you need is a reliable SERP scraping API and you are good to collect high volume data from Google shopping and other eCommerce websites. Extract real-time data and analyze it to see where your competition is going.
Conclusion
Any business that utilizes data in pricing decisions holds a competitive advantage and enjoys higher control over price points. Such companies will always notice opportunities to boost profits. Besides, they can easily align their pricing with their company objectives. Start price monitoring today and implement a competitive pricing strategy that can give your competitors a run for their money.