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Retail pricing under spotlight

Monday April 16 2012

Pricing intelligence expert Vol Pigrukh highlights the need for retailers to monitor pricing across all channels more effectively in 2012

Pricing intelligence expert Vol Pigrukh highlights the need for retailers to monitor pricing across all channels more effectively in 2012

 

It’s all to play for in 2012 with the trend in online shopping driving retailers to invest heavily in their online sales platform.

 

Vol Pigrukh, chief executive of competitor pricing intelligence firm Profitero, has highlighted the need for retailers to monitor their online prices closely in order to eliminate errors and increase traffic to their e-commerce website.

 

“One area of retail that is outperforming all others right now is online,” said Pigrukh. With consumers using the internet more than ever to hunt for bargains, businesses with a strong online presence offering the most up-to-date and accurate, competitive prices will fare best in 2012.

 

“By monitoring their online prices daily, retailers can ensure that their products are competitively priced and they are not losing out on traffic from search engines such as Google because of pricing; high prices or having incorrect prices attached to products are the most common reasons for losing out on online sales.”

 

Price checking best practice

 

Pigrukh said it was a simple task to check the online price of one product. But what happens when you have hundreds or thousands of categories and need to check the prices of all products? The screenshot (below) shows a range of products where the electronics retail giant Big Apple is not monitoring their pricing effectively.

 

Big Apple Amazon screenshot

 

“Here we can see that many of Big Apple's products are listed on Amazon.co.uk as £999.99,” he explained. “This error may have occurred in the upload of the product data to Amazon or at an earlier stage of Big Apple's pricing exercise.”

 

A similar entry was noted on Amazon.co.uk in the first week of 2012 for a set of headphones by Skullcandy. “Below we see that the price of the Skullcandy Headphones rose from a competitively priced £45.99 to £999.99 in the first week of January,” Pigrukh continued.

 

Big Apple Amazon Skullcandy headphones screenshot

 

He claimed such errors prove that retailers need to take adequate time to carry out checks to ensure prices are correct in all channels – stores, catalogues, e-commerce website, resellers websites and price comparison websites.

 

Driving online competitiveness

 

“By using an online price monitoring system, retailers can enjoy a competitive advantage over less sophisticated retailers,” he said. “And, by offering a strong multichannel shopping experience to customers, coupled with online price monitoring strategies, retailers can eliminate any price advantage that the competitors may have.”

 

The pricing expert added that online retailers have the added advantage of being able to monitor their competitors’ prices online and react quickly to changes in these pricing strategies. “If prices are too high, you’re losing out on sales and if prices are too low, you’re leaving money on the table – so these are the two key scenarios where retailers need to manage prices better and benchmark prices against the competition,” he said.

 

“As well as pricing, shipping charges and out-of-stock information can also be monitored online. Building a strong online presence with accurate pricing and timely access to online competitor pricing intelligence is now essential to the survival of the online retailer in 2012,” concluded Pigrukh.