Price Monitoring Generates Insights

Monitoring competitors' prices is important for businesses not only as an assessment of the goods’ cost from different sellers. This is a tool that helps to understand the strategic situation with prices at the moment, quickly identify their trends and respond to them correctly. After all, if you skip dumping from competitors, you can, at best, incur losses, and at worst, lose your business.

Despite budget cuts, 26.6% of CMOs say they will increase spending on marketing technology such as automation tools.

Lack of a Unified Scheme Implies price monitoring

The optimal price tag for a product can be set taking into account the following factors:

1. Retail price is the product's starting price plus advertising, taxes, and development costs.
2. Markup — a premium to the purchase price tag, considering the company's internal policy and market development in a particular segment.
3. Margin — the difference between income and expenses from the goods sale.

The basis is always the cost of goods. There can be no single pricing scheme due to the difference in the goals of market actors. Some focus on low prices, others on overpricing with maximum margin in mind, and others analyze the market and set a neutral price.

Critical Options for Pricing Strategies

There are as many pricing strategies as stories in the literature — many but famous patterns are used. Below is the most popular economic plan regarding pricing.

• Recommended Retail Price — the manufacturer sets it and has a single task: standardizing the price tag for all regions and stores that work with the same goods.
• “Multiply by 2”. It is the cost of the product that is subject to doubling. In this case, the markup on the goods sold will always be 50%. It is the most uncomplicated pricing.
• Low price + additional sales. The product cost is minimal, but the buyer is inclined to buy "little things." Earnings are precisely "little things," and the main product can be sold even at a loss-making price — to attract a client.
• "Reduced price tag." The cost is set lower than competitors, and further price drop formation is carried out after revaluation based on the results of market monitoring.
• "Inflated prices" is a pricing technique for retailers seeking to position the product they sell as more valuable and, therefore, more expensive.
• Promotions, bonuses, cashback — "barkers" get started. Studies have shown that 86% of customers are willing to wait for Black Friday or the New Year holidays to make big online purchases.
• A course on the psychological perception of the price: the more positive the client perceives the price, the more likely he is to buy it (the price ends with 9).
• Binding different products to the anchor cost. Higher-priced items are placed next to lower ones. Another option is to show the client before and after discount prices.
• The price differentiation strategy says to impose on the buyer a product in a set to stimulate him to a complex purchase.
• Dynamic pricing strategy. The formula of the seller's behavior depends entirely on the market situation and the conduct of competitors.
• “Customer focus” is a strategy that nullifies all numbers, and emotion becomes the main tool. It is necessary to understand the motives of customer behavior that can motivate them to purchase a product.
• Cost pricing. First, profit is determined, and an expense component is added to this figure — the actual price tag of the goods.

Review these points and ask yourself: in what cases is it necessary to monitor the competitors’ prices, and where can you do without it? Hint: There is room for application not only in price monitoring but also in data science.

The Invisible Hand of the Market

Mr. Adam Smith gave a good idea with his “invisible hand” metaphor about using individual interests to maximize social wealth. So, market monitoring is the very hand that leads to the point of union of the curves on the supply and demand chart. Each segment of goods and services will have its own exceptional cases, but generally, the law works: whoever owns the information owns the world.

In our case, information is Big Data obtained by web scraping or using the site's API. Replacing manual monitoring with automatic one has made this economic tool so accessible that it is cheaper. And this is the trend for the future in the global economy, since data, in another metaphor, has become the oil of the century.

Most importantly, price ranking benefits businesses large and small alike, with the monitoring availability significantly increasing. There are several ready-made tools that you can use yourself. But if there are individual requirements, you can turn to the software as a service scheme. DATAFOREST has worked in this market for a long time and has many successful projects. If you're interested in a topic, let's get in touch.

Price Monitoring: Do It Yourself or With a Scraper?

Competitor price tracking is a sequence of actions to determine the segment of competitors, monitor prices and develop marketing pricing decisions.

There are several methods of price "reconnaissance":

1. Manual
2. By phone
3. Aggregators and marketplaces price monitoring
4. Market monitoring in accounting systems
5. Automatic price monitoring (scraping)

The first two methods are "manual," and the last three can be done automatically using web scraping or can keep API. The question in the title can be rephrased as follows: would you like to clear the snow manually or with a scraper? Only the necessary data may turn out to be more than snow in winter.

Manual price monitoring

The typical manual price tracking system comes from the retailer's awareness that prices must be monitored. Because manual price tracking systems emerge from spontaneous decisions, they are simple. Such systems can use a spreadsheet on a computer to store data. The frequency of updating information needs to be higher.

There may not be enough hands for manual tracking

The seller may occasionally visit a competitor's store or call stores to find products that indicate a price level. You can also manually scrape prices by site, but the number of competitors, in this case, can be in the hundreds, much more than in the case of a geographically delineated area.

What is good and evil in manual monitoring

Strengths:

• no additional knowledge required
• no specially trained staff required
• no extra costs for hardware and software

Weak sides:

• long process time
• possibility of human error
• bias due to missampling
• the work of employees on monitoring distracts from the main work
• only a small amount of data can be processed qualitatively

What is automatic price tracking?

Automatic monitoring of competitors is a regular process of collecting prices and stocks of goods on Internet sites, where data changes very often. An automated price tracking app is carried out without the participation of the company's personnel. With automated price monitoring systems, it is possible to quickly track and respond on time to the rapid change in the market situation in highly competitive industries such as e-commerce. Hotel price monitoring is also relevant, same as oil price monitoring. Recently, retail price monitoring has been no less popular.

The primary method of automated dealer price monitoring is scraping — the legal extraction of open data from various sites, then presenting the results conveniently for human understanding. Scraping can be used in three ways:

1. Write your code to solve specific problems. It is expensive (a separate project with its own team and manager), so the solution is more suitable for large businesses.
2. Use the ready-made scraping tool. It will significantly speed up price monitoring, but the tool must be fine-tuned to your needs.
3. Contact the price tracking service (SaaS). A third-party company, such as DATAFOREST, will provide a set of necessary custom tools, analyze the results and issue practical recommendations.

The National Bureau of Economic Research (NBER) experimented with the Seller Hub tool on the eBay platform. The results showed that simply using data science service results increased weekly sales by 3.6%.

Outside help is better but expensive

A competitive pricing strategy in an industry as dynamic as e-commerce requires a highly specialized service. For example, SaaS price tracking software will have enough functionality to analyze the received data.

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Roughly speaking, a scraper is the initial stage of a SaaS. The main disadvantages of price scraping using ready-made power tools for which you have to pay monthly:

• not high accuracy of automatic comparison of goods is possible
• the need to individually configure the scraper for each site by the user himself
• problems with bypassing site protection from scraping
• lack or brevity of functionality for data analysis

A clear advantage of ready-made price monitoring tools is the lower cost of using scrapers compared to SaaS.

SaaS pros:

• plug and Play technology — a turnkey solution
• practical functionality for data analysis
• pricing advice

The disadvantage of software as a service is the high price for use compared to universal scrapers.

Most Popular Price Monitoring Tools

Third-party assistance with tools in tracking competitors' prices can have three incarnations, which are discussed below with examples.

1. uXprice is SaaS; its data is stored in the cloud and available anywhere. Customizable reports are also uploaded to Excel or via API for the desired purposes. To start tracking prices, you need to register and upload your products.
2. Xmlatafeed is a regular price scraper without additional analysis functionality. The output is a file with price info downloaded from the competitor's website. The cost of the service depends on the number of such competing sites (the scraper is configured individually for each of them).
3. Elbuz is not a highly specialized price scraper or SaaS but a whole system for automating the daily processes of online stores. Among the extensive list of features, competitors' prices are monitored.

Among the highly rated tools are also: Visualping, Competera, Fluxguard, Skuuudle, Omnia Dynamic Pricing, etc. Some drop alerts if the parameter or product reaches a critical value. DATAFOREST also provides services for collecting and analyzing data on competitors' prices, so please contact us.

Monitoring Competitors

The success of a business directly depends on the pricing strategy, which must be determined with an eye to the dynamics and market conditions. How many big sellers are there, and who are they? How many others and how different are their pricing policies? Answers to these questions are necessary for all retailers to attract customers with the best deals. Now you can't play poker with prices; reseller price monitoring is an open game.

Live trading

Competitor price monitoring software is a system for searching and constantly collecting product data to assess, control, and effectively manage pricing to increase sales and competitiveness in the market. In carrying out, analogous for each product category, the popularity of positions is determined, novelties are highlighted, and the assortment policy of specific sellers is.

Price monitoring apps allow you to accurately maneuver between the difference in found prices in the market and spontaneous bursts of supply and demand. The seller has accurate, up-to-date data, thanks to which he understands strategic decisions in general and at what stage of each specific product's life cycle. It's like live football, not recorded.

Rules for Reliable Price Tracking

Before you start monitoring competitors, it is vital to identify them. Keep track of where their target markets are and whether they match yours. Also, find out where your competitors have expanded their marketing territory and effectiveness. It will help you discover an untapped market for your products and services.

Competitor price tracking techniques can differ regarding the number of tools used and the semantic direction. But they all boil down to implementing some rules, the general ones of which are the following.

• Regular visits to competitors' websites will help you understand the latest changes, news, events, and product launches to improve your website.
• Even if you're an established business, you must keep track of competitors' prices to ensure you're not overcharging or undercutting your offerings.
• Sometimes referred to as media monitoring, this is tracking the mention of keywords associated with a brand on the Internet.
• Analyzing competitors' content will help you understand their content strategy, which is essential for marketing. Monitoring competitor social media accounts is a similarly powerful method.
• Constantly monitor the overall marketing strategy of your competitors and then analyze and compare it with yours. Big Data analysis will surely provide insight.
• Tracking customer service feedback on products and services provides insight into the strengths and weaknesses of competitors. There is a reason to compare with your own business and reviews at your own expense.
• Finding where competitors need new hires will provide insight into their next strategic move. Forewarned is forearmed.
• Monitoring prices will be more accessible if you use an automation tool or software as a service. Data-driven decisions can change your marketing strategy.

The last point "covers" all the others — automatically carrying out such a plan is easier and cheaper.

Tools for analyzing price data

Price analytics refers to comparative and predictive software that provides invaluable data for product trends and competitor monitoring. The price analytics tool allows e-commerce retailers to set optimal pricing strategies that convert customers. Knowing how competitors charge prices and discounts gives you an idea of how best to price products before going to market and your discount strategy.

The process of price analytics fits into three simple steps:

1. Price tracking.
2. Monitoring and analysis of price data.
3. Strategic pricing decisions based on data analysis and SaaS partner recommendation.

After all calculations, you need to check the price constantly.

Price monitoring with scrapers

In the commercial realm, a large amount of extracted data can be used for business analysis. It can help analysts and market sellers assess the potential value or make more important decisions. Below are three powerful tools for price scraping.

1. Octoparse is a free web scraper. It is used to get data from Amazon, eBay, AliExpress, Priceline, and other sites, including data on prices, reviews, and comments.
2. Import.io is also known as a crawler. It offers a Magic tool that can convert a site into a spreadsheet without any special training on the user side.
3. With Scrapebox, users can easily collect data from a website to access email addresses, check page rank and working proxies, and submit news and blog change requests.

Note that the tools help monitor prices, but do not provide analytics, much less its interpretation.

Mystery user

Mystery shopping is a technique that involves using trained people to test and measure critical stages in a product's life cycle by acting as customers and reporting their experiences.

In the case of competitive price monitoring, this means that, for example, mystery shoppers can use the application on their iPhone and Android gadgets to take notes and photos for reports. This tool allows managers to ask "buyers" to accept and annotate as many photos as needed. It is in the case of a physical visit to a competitor's outlet.

In the virtual space, "mystery shopper" is a market research tool based on artificial and human intelligence. This mystery shopping app uses answers from mystery shoppers to help improve business operations.

How to Properly Manage the Results of Price Monitoring?

Collecting data on competitors' prices (whether by hand or using scraping tools) is half the battle. Now the received data needs to be read and analyzed correctly. With some preparation, you can do it yourself. But SaaS is good because the information is collected and analyzed in this case. The analysis results are provided in the form of specific practical recommendations.

Preparing price data for analytics

Research data can be in the form of a qualitative or quantitative study. Using the right combination of both methods implies maximum information content for price analytics. The most commonly used tools for conducting price analytics:

• The choice-based modeling technique calculates willingness to pay for specific products or services using joint and maximum difference analysis modeling techniques.
• Van Westendorp's price sensitivity allows researchers to understand the value of fundamental psychological price targets and how much consumers wish to pay for a product or service.
• The Gabor-Granger method is a pricing study to determine the income and demand curve for a particular product or service, allowing you to choose the price elasticity of a product.
• Focus groups are a qualitative research method for collecting detailed information about a product/service. A trader can use a continuous discovery model and continue to adjust prices based on various macro and micro market factors.

The combination of these methods increases the reliability of the price analytics results.

Why do you need a price tracking analysis?

Pricing analysis is a research process to determine the ideal price for a product. It's all about finding the sweet spot: a price your customers are willing to pay that's not so low that it gives the impression of poor quality but also not so high that your target customers can't afford it or aren't willing to pay for it.

You have probably heard something similar to "pricing analysis" and "competitive pricing analysis." These are not interchangeable terms. Competitive pricing analysis is an analysis of your competitors' prices and how you should price your product to be as competitive as possible. On the other hand, "price analysis" describes a more general analysis that considers competitors' prices but also considers factors such as your customers and what they are willing to pay.

Determining the ideal price for your product is hard data science. Several factors can be considered, such as the costs of creating a product finder and running a business, the prices of competitors, target consumers and what they can afford, prices that target consumers are willing to pay, and much more.

Always be on trend

The data collected by tools or SaaS can be analyzed from different angles, considering the merchant's needs. For example, you can analyze trends and learn how to deal with customer behavior so that it has a beneficial effect on sales.

• Consumer trend analysis examines the factors that influence the consumption of a product. It provides insight into customers' needs and behaviors and what influences their purchasing decision.
• Price history analysis provides info about emerging and future trends as well as past.
• Seasonal or time analysis looks at changes in market trends due to external factors such as holidays and weather.
• Geographic trend analysis studies variations in specific locations. You can compare trends across regions, countries, and continents to see their development.
• The essence of social media is that consumer trends go through social channels before they affect the market for goods and services.

Trends are a very revealing analysis option that is constantly changing. To accurately track it and draw conclusions from the results, it is better to use data science. Then the seller will always keep abreast of trade.

Analysis helps you grow

Before looking for opportunities to optimize pricing, you must understand the business direction, resources, strengths, and potential. Full transparency is the key to making decisions based on product price monitoring data. Then you can evaluate the market and consumer needs and how sellers meet them now. Then, start looking for a solution.

• Divide the consumer audience based on commonalities. It will help you effectively target the right group.
• What, when and where consumers buy can be influenced by many factors. You must browse buying patterns and how to change the offer to influence those decisions.
• Do research on where your business is in the market. And find out what other key players are doing to create a competitive advantage. Then understand how they relate to your business.
• Indirect competitors target a similar audience but sell different products that meet the exact needs. Analyzing what companies in replacement industries are doing will help improve the offer and attract new audiences.
• Track the effectiveness of products and services that complement your sales.
• If a company has reached a high level of maturity in the current market, a diversification analysis will help you understand how and where to grow.
• If the business operates in a mature or saturated market, studying other countries' needs will help achieve financial goals.
• Remember to analyze the external factors that affect trading. These are economic situations, geopolitical events, rule changes, technological and scientific developments, and environmental factors.

If you carry out the analysis yourself, you can get confused about the points that are needed or not. In the case of contacting SaaS, specialists will leave only the necessary factors in the analytical note.

Adaptation based on price tracking results

Price is more than just a reflection of the value of your products and services. When properly read, e-commerce price monitoring tools analysis and sales adaptation to innovation can be of interest to customers and become a reliable promotional tool.

• Customize adaptation to price discounts and promotional offers
• Maximize customer value factors or non-price leverage
• Apply research findings to get price changes and adjustment strategies
• The price adjustment decision must be precise and aggressive to be more successful
• Ask: What else can be done to cut costs?
• Flexibility needed to adapt to new price adjustment strategy

Thus, the transition to a new strategy based on the results of competitor price tracking will be smooth and comfortable. This method is popular, for example, in retailer price monitoring.

Making data-driven decisions

Pricing is a complex process because it includes data about competitors and many characteristics of your popular shopping audience. That's why you need to make data-driven pricing decisions. When consumers had limited market knowledge, sellers had more freedom to make decisions. But pricing in online sales is transparent, and you have to maneuver between solutions like a slalom skier on a track. It is where service can come in handy.

Define dynamic pricing rules

Dynamic pricing is a strategy that uses a repricing algorithm to adjust product prices to changing market conditions. These rules can be based on costs, target profit margins, competitor prices, etc.

If you want to match or outperform your competitors, set dynamic prices that adjust whenever your competitor changes price. For example, the price should be 5% cheaper than the cheapest competitor. You need to add cost-based rules to ensure you sell at least cost. The target price should be $15 less than the average price but not lower than my cost of +4%. Flexibility eliminates the risks associated with a heterogeneous trading environment.

Creating artificial demand

Merchants want to sell goods as quickly as possible, which reduces maintenance and storage costs. If the product has an expiration date, the issue becomes more urgent. To do this, there is a promotion of sales of goods to increase demand. To implement it, they use promotional pricing — a method in which companies temporarily reduce the prices of certain goods below the list price level. It applies to discounts, loyalty programs, coupons, and free shipping.

The primary method of advertising pricing is as follows:

1. Goal definition
2. Strategy implementation plan
3. Picking the best time
4. Buyer group selection
5. Setting a fixed budget
6. Collecting feedback

The exact execution of the plan is influenced by the quantity and quality of data collected through e-commerce price tracking.

Setting a competitive price

Once the pricing analysis is complete, a strategy can be implemented that positions the merchant in the market relative to competitors. There will be three main options:

1. Above market price — depending on market share and brand perception, it is possible to rank your product as premium and beat the competitor's price.
2. Fair price — if the decision is made to compete on price alone, own value is set according to competitors' prices.
3. Below the market price — in this case, it is a distinctive feature and a means of attracting potential customers since the merchant positions his product as cheaper.

At this stage, all errors will be revealed if they were made during online price monitoring. To avoid inaccuracies, it is better to use the tools or services of specialists.

Big Data Drives Sales Efficiency

The effectiveness of online sales is directly dependent on competition, so tracking the prices of other sellers is a task of the first importance. Scraping or a SaaS service is the best way to do this quickly and get accurate data.

Scraping tools were the first solutions in this area, and over time, their capabilities only satisfied some of the needs of e-commerce representatives. Therefore, they have been replaced by modern cloud SaaS services.

When choosing a service to monitor competitors' prices, choosing products from leading developers is better. Due to their extensive experience, they are better adapted to the specifics of the e-market and will always be able to provide prompt support.

Benefits of Competitor Price Monitoring

Using automatic tracking of competitor prices, a trader gets the following:

• Resource Saving
• Building an effective pricing strategy for different product groups
• Purchases on more favorable terms
• Quick response to market changes
• Correct positioning
• Increase traffic and conversions
• Growth in sales and profits
• Increasing user loyalty

It is tough to achieve these results with manual price monitoring; to a greater extent, the above advantages apply to companies that use specialized services to track prices.

Everyone has their own strategy

The trading strategy depends on the type of goods and services, the size of the business, the qualifications of managers, etc. Choosing the right strategy with the help of an e-commerce price monitoring tool is easy; knowing exactly what you want is essential. And how to achieve this, the tools or a third-party SaaS will tell — after collecting and analyzing the data.

Total Benefit

The purchase of a product or service is a sign of agreement between the sellers and the buyer; that is when the purchase benefits both parties. Price tracking is helpful for an even larger circle of people — analysts, economists, and IT specialists join sellers and buyers, who will lead the seller to the correct and balanced price through data science. After leaving the offices, these professionals will become buyers and continue to develop the economy through trade.

There is no need to be afraid of mistakes; you must be scared of repeating mistakes. And to avoid them during price monitoring, it makes sense to turn to the price analysis leaders in the e-commerce field, which is DATAFOREST.

FAQ

Why does a business need price tracking?

Price tracking refers to monitoring and analyzing the prices of products or services in a particular market or industry. It involves collecting price data from various sources, such as competitor websites, online marketplaces, and brick-and-mortar stores. The goal of online price tracking is to stay up-to-date with the latest price trends and gain insights into competitors' pricing strategies.

What are the main price monitoring strategies?

The main price monitoring strategies are manual and automated monitoring, historical and competitor analysis and price optimization. The choice of strategy is custom in each case. The level of price increases the level of responsibility in any case.

Is there room in the digital world for manual tracking?

Manual tracking can be helpful for smaller businesses or businesses with a limited budget for price-tracking tools. Manual monitoring may be necessary to ensure compliance with industry regulations if a company tracks prices in a highly regulated industry, such as pharmaceuticals. While automated price tracking tools offer several advantages, manual tracking still has its place in the digital world, such as "mystery shoppers."

How does automatic price monitoring improve business competitiveness?

Automatic ecommerce price monitoring tools can provide businesses with real-time insights, help optimize pricing strategies, enable faster response to market changes, improve pricing strategy, and enhance customer experience, ultimately raising business competitiveness.

What parameters determine the brand's pricing strategy?

Various factors influence a brand's pricing strategy, including the cost of production, market demand, competition, brand image and positioning, customer perception, and marketing and promotional activities. Brands need to carefully consider these parameters when developing their pricing strategy to ensure that they are setting competitive prices that align with their overall business goals.

What are the best practices for promoting a price-tracking strategy?

Promoting a price-tracking strategy involves establishing clear objectives, identifying key metrics, using reliable data sources, choosing valuable tools, creating actionable insights, and sharing insights with key stakeholders. By following these best practices, businesses can ensure that their price-tracking strategy effectively drives growth.

What are the best price-tracking tools to use?

There are several price tracking tools available on the market that businesses can use to monitor and analyze pricing data: Price2Spy, Prisync, CamelCamelCamel, Keepa, Wiser, and Competitor Price Watch. A business's best price tracking tool will depend on its specific needs and budget. Due to the industry's popularity, the retail price monitoring system presents the most striking examples.

How can a seller take advantage of the collected price data?

Using pricing data collected from a price tracking tool can help sellers make informed decisions about their pricing strategy, monitor competitors, identify trends, forecast demand, and improve sales performance. Theory can always be translated into real deals.

What difficulties arise when implementing a strategy based on e-commerce competitor price monitoring, and how to overcome them?

While implementing a strategy based on price monitoring can present some challenges, these can be overcome by focusing on relevant data, using real-time data sources, filtering out temporary promotions, investing in advanced monitoring tools, and using pricing analytics software to implement an effective pricing strategy.

Does price tracking have legal or ethical issues?

To avoid legal and ethical issues, businesses must ensure that they are collecting and using pricing data in compliance with laws and regulations. They should also be transparent about their pricing strategies and how they use pricing data to make informed decisions. Additionally, businesses should ensure that their pricing strategies are fair and not anti-competitive and use pricing data responsibly and ethically.