How to win with shoppers in a price-transparent world
Retail data analysis expert Christian Koestler argues out that the power of price comparison technology is something retailers cannot afford to ignore in todays internet-connected world
Retail data analysis expert Christian Koestler argues out that the power of price comparison technology is something retailers cannot afford to ignore in today’s internet-connected world
Consumers today are smarter than ever. The internet has made it easier and faster than ever to comparison shop and during these challenging economic times, consumers have leaned even more heavily on the Web to do research and find good deals. This is not going to change, even as the economy recovers, so Christian Koestler, Lixto Software president and chief executive, asks how should retailers respond in this price-transparent world?
Simply by using ‘price intelligence’ – the data produced from computer-based systems that identify, compare and analyse pricing and other revenue-related information for a business’s own operations as well as its competitor’s – data that is critical to making informed pricing decisions, he said. Providing the ability to instantly evaluate the market impact that competitor price changes create, price intelligence allows retail management to gain a deep understanding of what each change means for margin and market share, Koestler argues.
Staying ahead of the competition
“Price monitoring is crucial of course,” he said. “But by using price intelligence systems, retailers can also access and monitor a much broader range of data from product information and model specifications through to assortments, product warranties, individual service terms and local taxes. Also increasingly important are details on quality ratings for specified products and vendor rankings. If your customer is thinking about purchasing a product from you, you can be sure that their decision will be based not only on price, accessibility and availability, but also on the ‘added charges’ for shipping, not least what reviewers and other purchasers have got to say about your product. By using advanced price intelligence solutions, retailers can stay ahead of the game, basing their pricing, promotions and additional charges on the most advanced market information.
“So how does it work? Price intelligence is a digital process, designed to monitor thousands of products, prices, terms and product rankings across multiple competitive websites within a pre-set criteria. It manages individual sorting, filtering and report configuration for all available product criteria, exception reports, configurable alert notifications, time series analysis and meet/beat ratios. Aggregated rate information allows retailers to conduct incisive rate analytics and integrate online competitive comparisons with in-house price and forecasting solutions,” Koestler explained.
Harnessing dynamic decision support
The most advanced price intelligence systems on the market can turn this data into usable, easy-to-understand formats and trends analysis with detailed analytics across specified product categories and competitors – valuable information for any retailer.
Koestler also pointed out that this level of intelligence allows retailers to build models for “what if” analysis, which is also important for price optimisation. “Without this, retailers can find it hard to update and optimise prices in response to market forces, in effect, paralysing them, so that it becomes increasingly tricky to meet sales and profit targets,” he said.
“It’s a fact that now, more than ever, retailers are looking for new and different strategies to remain dynamic. Customers are increasingly demanding and for retailers involved in online sales a slow response can lead to shopping basket abandonment. With price intelligence a retailer has a precise and complete market picture, allowing him to make market-savvy decisions and confidently promote products knowing that they are competitively priced and positioned, creating dramatic long-term impact on their brand,” he concluded.
Christian Koestler is president and chief executive of Lixto Inc., a global leader in web data extraction and analysis for the retail, hotel and consumer products industries. He also holds the position of managing director for sales and marketing at Lixto Software GmbH, the company’s headquarters in Vienna.