Price optimization is actually a base for generating income in a retail trade, and especially in e-commerce. Don’t cheat ourselves. Discounts aren’t still working so well and optimizations of stores don’t cause bigger changes in sales. So what should we concentrate on? We should have a closer look at product prices. Sometimes a little change can result in lower sales, but in better margin and more money for your business.
How can price optimization help in e-commerce?
All models of retail price optimization enable companies to use their product sales potential on the market.Thanks to appropriate analysis, companies are able to state how consumers spend their money – when, where and what products they buy.
Based on historical data, we aren’t always able to define sales potential, because there are many factors, which influence on it. Some of them are:
- Changing trends
- Complexity of products / bundles
- The fact that consumers are more price-conscious
That is why let’s have a look at that how e-commerce business can use price optimization.
5 benefits of price optimization in an e-shop
1.Get immediate financial benefits
The main benefit is that solutions of retail price optimization give us an opportunity to concentrate on different details in a shop.For example:after carrying out a price optimization process the sales in a given product category can be lower, but the margin as a whole goes up. That is why you can concentrate on refining, for example, issues of your shop service. Pay attention to your product packaging and importance of your brand. Let your customer remember your brand. Improve also your product descriptions by giving lots of details. Thanks to that you can encourage your customers to shopping.
2. Parallel working with many categories
Thanks to price optimization software you can use some rules to particular categories from your store. Price strategies can be activated automatically, semi-automatically or manually – it all depends on specification of a given industry or products, which you sell.
Notice also that this system can be very helpful and useful to the category manager (PM), who will simplify a complicated work with all categories. Thanks to that support, the worker can be more effective.
3. Automation of all processes in a company
This type solutions enable to a large extent process optimization. Price optimization system helps to eliminate the need of manual work and minimizes the number of possible mistakes, caused by a human factor. Thanks to automation there is no need to do random sales forecast or hope for a better tomorrow. Having all data in one panel, companies can adjust prices every time it’s needed. What’s the most important, price changes can relate to all sales channels at the same time.
Do you wonder why Amazon is such a giant? Amazon makes several prices changes everyday -thanks to that, we can also talk here about the magic of the lost benefits. Do you think that they could do it all manually?
4. Price cohesion warranty
When you use price optimization in your sales channels, you don’t have to worry about cohesion of your offer. Thanks to establishing rules most of mistakes can be eliminated, and your offer will be cohesive. Your customers won’t be confused any more, because prices will always be correct and appropriate.
5. Make decisions quicker, based on data
Use price optimization system and speed up your decisions, based on hard data and not intuition. Thanks to automation you’ll react to trends and changes at your competition quicker.
As you can see, thanks to solid technology of your price optimization, e-shops can derive financial benefits immediately, work with many categories at the same time and automate processes, what will result in reducing workload and provide you with a greater accuracy of your actions. So if you want to develop your business, you should optimize your prices. The success of your e-shop is within reach. Do you need more information about price optimization? Contact us.
I am involved in a broad range of e-marketing and visual identification. I have been practically associated with Brandly360 since the beginning. A passionate lover of good music and vinyl records.