How should prices be monitored?
We recommend monitoring the largest online stores (usually less than 10-15, depending on the country), price comparison sites and auction portals.
I already monitor price comparison websites, is that enough?
Definitely not, for several reasons:
- Shops don’t issue a full offer in comparison engines.
- Often there is no reliable information about the availability of goods.
- Usually there are several product pages of the same product (different prices, sets, promotions).
What should be monitored?
- Shops – price, availability, promotions.
- Price comparators – price.
- Auction portals – price, sales volume.
Why is it worth monitoring prices, availability and sales of your own products?
- Exerting pressure on the shops which first lowered the price (not in every country legal :). Taking care of the right margin level on the market is considered to be one of the key challenges, especially with low-margin products.
- The ability to monitor the price flexibility of products.
- Detection of potential fraud (financial, tax, customs) – shops with very low prices.
- For some chains the possibility to determine the availability of goods in individual stationary stores.
Why is it worth monitoring and observing the prices of competitors?
- We monitor changes in pricing strategy.
- Based on sales data from auction portals, we can determine the popularity of products and even try to estimate the effectiveness of promotion of competitors’ products.
- Comparison of sales with the competition also allows to increase the quality of analysis of own promotional activities (elimination of external factors).
- We can easily monitor the quantity of available products of our competitors in stores (shelf share).
Is it necessary to monitor prices in foreign shops?
The answer is not clear here, because it depends on several factors, e.g. shipping cost. However, nowadays, the borders in Internet trade are blurring, e.g. a customer can choose any Amazon store from Europe and order goods where they are cheapest. So if there is no logistical and tax barrier, the availability of cheaper goods abroad will definitely affect sales in the local market.
Benefits of price monitoring, availability and sales of products
- Price monitoring – detection which shop first lowered prices – support in managing subsidies.
- Analysis of the impact of competitive price changes on the sale of own products – the diagnosis allows to establish a strategy for responding to price changes in competitors. Example: a competitor introduces a price reduction which causes a decrease in sales of our products. Reaction: lowering the prices of our products immediately after a price change in the competition.
- Closer monitoring of the effectiveness of our own promotional activities. This is particularly important because relying on sales reports provided by stores can be very confusing.
- Shelf share compared to the competition.
For some chains, it is possible to determine the availability of goods in individual stationary stores.