3 Ways Price Intelligence adds Value to Your Product Information
Transparency created the need for Price Intelligence
“As ecommerce became state of the art, the purchasing decision process experienced a paradigm shift. With information about virtually anything at their fingertips, the consumers first research WHAT they want and then decide WHERE to get it. Look at your phone and remember how you bought it. Was it suggested by a friendly brick and mortar store consultant? Or did you KNOW you want that specific version of the iPhone before you decided where to buy it? The latter is normal for digital natives. So, the new paradigm is: pick a product, pick a retailer, buy”, said Vladislav Gordon, Head of Product Management at Priceintelligence.net.
Online created another challenge for retailers: price transparency. If 20 years ago you would need to travel to multiple stores physically to check the prices, you can find the cheapest offer in the country within seconds now on your favorite marketplace or a price search engine. As a retailer, you should assume that your today’s customer is aware of market prices which creates a need for you to know them too.
Mobile Shopping and Showrooming
The rise of mobile gave the price transparency another boost: If before the smartphone era the customers would have to be at home or some other place with internet to research the prices on a product, they can do it anywhere today. Even in a shop, while they are looking at a physical product. What if you can order it on amazon with on click and have it shipped on the same day? With some luck, it will be at home before you… “This phenomenon is called “Show rooming”, said Vladi, when I talked to him recently.
Customers expect a Fair Deal
What does this all mean for companies selling online? Of course, this doesn’t mean that only the price matters. Nor that you must be the cheapest. However, the consumer awareness creates a need for a FAIR deal. The fairness of retailer’s value proposition is mostly defined by a combination of the following factors:
Price is the single biggest variable in the buying decision. It’s also the easiest one to measure and compare since it’s already an absolute number (whereas the experience for example can be hardly expressed in numbers). The bigger the assortment is, the more likely a customer will choose a retailer. “One stop shops” are easier to shop, and because the customers like “easy”, it’s more likely that they’ll choose a retailer for their next purchase. Customer service is critical. How easily can I return the product? Are return free? Can I call the online shop and actually talk to a person if I have a problem? Will they refund the money if the product is damaged? Is there a one click buy or does the checkout process have 27 steps?
Experience is about the emotions. How do customers feel when they shop? Brick and mortar stores have a huge advantage over the online sellers because they can create emotions that a monitor can’t. Is the store a beautiful place? Or does it look more like a warehouse? In the end, online and offline, the sum of these four factors will decide. A retailer with the cheapest prices on the internet, can afford to offer lousy service to their customers and no experience. Great service on the other hand justifies a higher price, and so on.
Turning Data into Actionable insights
So, what can a modern digital enterprise do to lead in this game? The answer is: be aware of your competition and actively manage the four aspects mentioned above. However, this turns out to be a pretty time consuming tasks if you have more than a couple of hundred products in the assortment. In fact, it’s impossible to track market prices for multiple thousands of SKU’s manually in an economical way. This is where price intelligence helps.
Price intelligence is a service which gives you a daily digest of the products where category manager’s attention is required. Vendors like priceintelligence.net (well known in Gemany), Clavis Insights (well established in CPG) and Indix (major player in North America) find every product online, collects offers on the market and gives you repricing suggestions based on your sales strategy configuration.
Three ways how price intelligence adds value to your product information
- Every day, there is a certain amount of products that are “overpriced” comparing to a representative set of competitors. Take action and decrease the price on those to gain more sales.
- Should this not be possible because of high purchasing prices, you can just export the respective products as Excel and try to negotiate those with your suppliers or restructure the assorment if no profitable business is possible.
- Identify products which underpriced – this is pure profit potential, money left on the table.Due to priceintelligence.net average, 10-15% of retailers assortment is underpriced.
Only few enterprises do have highly automated price intelligence solutions in place. This creates an enormous opportunity to differentiate in today’s highly dynamic digital business.
Priceintelligence.net and Integration with Informatica MDM – Product 360
Customers managing their product catalog with Informatica can leverage a seamless integration with priceintelligence.net. Informatica customers can get live by a simple configuration. This way, the monitored assortment can be defined and managed directly in Informatica.
“PriceIntelligence.net delivers a pre-built Informatica adapter, which enables importing of market pricing data, pricing level metrics, repricing suggestions, etc. directly into Informatica. This way a purchaser, a category manager or an online marketing manager can work on executing their optimal pricing strategy directly in Informatica”, said Vladislav Gordon, Head of Product Management at Priceintelligence.net.
Watch out for the next chapter on how data can made your business critical MDM product catalog more differentiating: product content benchmarking.