E-commerce is a highly competitive environment in which to operate. There are numerous platforms and individual sellers with similar or identical offerings, and it’s easier than ever for shoppers to compare prices before choosing who to buy a product from. Some websites even allow users to sign up for price drop alerts. While price is far from the only factor that buyers consider when making a purchase, studies show that nearly everyone compares prices before buying online, and over two-thirds of consumers consider it to be the largest influence on their decisions.
What Are Competitor Price Tracking Tools?
At its core, competitor price tracking involves looking at competing websites to check the prices of one or more products and monitor your competitors’ price strategies and promotions. It’s possible to do this manually through spreadsheets, but it quickly becomes very time-intensive if you’re tracking more than a few products or competitors. Companies are therefore adopting tools to automatically collect and analyze this data for them.
Discover how BizVibe can help you track your competitors’ prices.
Competitor price tracking tools typically take the form of web apps, extensions, or mobile apps. They can monitor large numbers of product listings and detect frequent price changes, providing you with timely and accurate insights into what your competitors are doing. This enables you to react quickly to price changes in order to stay competitive. It also makes it easy to identify market trends and form long-term plans, as you can look at historical data and see how it relates to factors such as seasonality and new product launches.
Many tools can also change the prices of your products for you automatically, according to rules that you set. For example, you could program it to set your price a dollar below the cheapest market price, or keep it at the average price for the market, or the lowest price plus a percentage markup. Customizable rulesets allow you to automatically adapt to price changes without going over or under certain boundaries. They also mean that your prices will stay competitive outside of working hours, since you don’t need to monitor and update them manually.
There are other benefits to tracking price changes automatically. With some companies changing their prices weekly or even hourly, price tracking tools can provide insights with a greater degree of accuracy and react to changes faster than a person or team who are tracking everything by hand and don’t have the time to check websites multiple times a day. An automated tool also eliminates the risk of human error, which becomes more likely to occur the more prices you’re tracking.
Analytics are invaluable when it comes to price tracking. It’s possible to collate and interpret this data manually, especially if you’re only tracking a few prices, but it becomes unwieldy quite fast. Many competitor price tracking tools are able to analyze the data they collect and provide actionable insights. Some work with AI and machine learning in order to provide the best results.
How Does Price Tracking Make You More Competitive?
Competitor price tracking is a highly useful tool for businesses that run an e-commerce platform. Many companies change their prices frequently and some, like Amazon, will make numerous price changes every day. If you’re not monitoring what your competitors are doing, you run the risk of being outpriced and losing customers to businesses that offer more attractive prices.
The lowest price isn’t always the right one, however. Sometimes customers will view a cheap product as being of poor quality or the seller as unreliable. Depending on your product strategy, you may want to offer an average or premium price in order to signal to customers that an item is of good quality. A competitor price tracking tool is useful here as well, as it can allow you to identify the lowest, highest, and average prices offered by your competitors and set yours accordingly.
It’s also valuable to know when your competitors are having sales. Armed with this knowledge, you can either match their sale in order to compete with them directly, or time your own sale for when their product is full price in order to attract a larger customer base. An extension of this is the ability to gauge the competitiveness of the market for any particular product. If prices are consistently low, you can evaluate whether it’s worth it to compete at that price point or to instead focus on other products that provide a higher profit margin. You can also increase the prices of products that face little competition in the market.
Another advantage of competitor price tracking is that it allows you to gauge demand and identify market trends. Take note of when prices fall or rise, and you can get a sense of seasonal fluctuations and other causes of change, such as new products entering the market. Once you have that information, you can plan your stock levels to take advantage of it, increasing stock when other vendors have less available and decreasing it when products are slow to move. If you have a popular product in stock when others are selling out, you’ll attract more customers and increase sales.
Despite all the benefits of price tracking, a substantial number of e-commerce businesses still aren’t doing it. This makes it a competitive advantage as well — not only can you easily keep up with the constant price changes made by big companies, you can also outprice the businesses who aren’t keeping a close eye on things.
How Do You Choose a Competitor Price Tracking Tool?
There are a variety of different options on the market depending on your budget and needs. For many small and middle-sized businesses, a web scraping tool will be a good option. It may lack some of the features of a full price monitoring platform, but it’s a budget-friendly option that can also be used for tasks like market analysis, reputation monitoring, and lead generation
For businesses with a larger budget and more products to track, a price monitoring platform can provide automated price changes, price alerts, detailed data analysis, and more, sometimes aided by machine learning. These platforms specialize in e-commerce and therefore come equipped with features tailored to the needs of online sellers, and can offer significant customization options. Platforms like these often require IT expertise to configure properly, but provide many benefits once set up.
Keeping Up with the Competition
The e-commerce industry continues to expand. Customers are increasingly opting to shop online, and often research prices ahead of time even if they intend to make a purchase in-store. With such easy access to product information and a wide variety of purchase options, it’s important to keep a close eye on your competitors and make sure you’re not falling behind. Price tracking gives you data and tools to help keep up with the most competitive businesses and pull ahead of the rest.
