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Retail and Hospitality

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Pricing tips for online retail

With retailers reducing store numbers and investing heavily in their online business, it is imperative that they know exactly what the competition is charging for products.

Pricing intelligence company Profitero provides four tips for online retailers to gain competitive advantage with their pricing.

1. Understand your customer's online habits
Online shoppers are using price comparison websites that have the ability to match products by rival retailers. They can check prices across many webstores in minutes before choosing the product with the best value for their money. If you are not pricing your products competitively, you will not be considered in the consumer's online decision-making process.

2. Larger retailers will be able to offer perks that smaller retailers cannot
Internet retailing giants such as Amazon can offer free shipping and other perks to shoppers due to the size of their business and special arrangements with third parties. While you might not be able to match Amazon on such deals, you can work towards ensuring that you are offering your customer the best price for the products you are selling online.

3. Know that your competitors are monitoring your prices
E-tailers are following their competitors' prices and changing their own prices quickly when changes are made on other websites. You need to do the same! Trying to manage this manually is inefficient and will take many hours from your other daily tasks.

4. React to online pricing changes immediately
Follow what your competitors are doing with pricing on the internet and react quickly to changes in their prices. The internet allows you to see competitors' price changes immediately. If your competitors are changing their prices frequently, you can do the same! You can lower your prices when they lower theirs, you can increase your prices to grow profit margins when there is too much of a gap between your low pricing and their higher prices, and you are also increase your prices when they are out of stock. You'll quickly learn to price correctly.

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