Editors Note: This guest post was written by Basak Saricayir from Prisync – details in the footer. We touched on pricing strategy in our blog post about How to Prepare for Black Friday/Cyber Monday. Here Basak gives much greater insight on pricing and competitive tactics – we hope you find this read as enjoyable as we did! ?
Standing out in a crowd isn’t easy at all. Especially in a crowd of this size. And 2020 sped up the digital transformation across the globe, making eCommerce even a bigger market welcoming an enormous number of new entrants each day.
But pricing is one powerful tool in your hands. One that gives you the competitive edge you need, if you know how to use it.
So within the next few minutes, you’ll learn how to stand out from the crowd and boost sales with smart competitive tactics like:
- Using competitors’ stock information to your advantage
- Getting greater control over your price positioning
- Personalising your offers using custom discounts
Covering all of them may take a while and some require training. But once you do, expect exciting results.
So, let’s dive in if you’re ready!
Use Competitors’ Stock Info to Your Advantage
2020 is unfortunately the most disruptive year in recent history. It changed the way things are for all of us. And we once again realised what agility in decision making brings to a business.
When faced with the disruptions in the supply chain, for one, some companies were quicker to find local suppliers and add some new products to their inventory. They weren’t just quick to spot the changes, they quickly adapted themselves too.
Seeing countless stores selling similar/identical stuff, shoppers no longer see a point in waiting for a particular store or brand. So those who had superior adaptive skills came through. Those who weren’t as successful were out of stock too often that it annoyed their customers.
Now, do you realise that you too can see your competitors’ stock availability?
That’s valuable information.
If you make sure you’re almost never out of stock of popular items, when competitors are, there’s a much greater chance you’ll drive their traffic to your website
And tracking competitors’ stock information will up your game in the following ways:
- When others are out of stock, you’ll be able to increase profit margins
- You’ll have a clue about what they sell the most, invest in those items if you haven’t yet.
This store, for instance, could easily charge $300 more, and they’d still be the cheapest. Why would they leave that much money on the table?
Some of you may think, what’s the big deal if I miss the opportunity to increase profit margins? Let me assure you, it’s a huge deal.
Because e-commerce doesn’t promise you crazy profit margins. In a market where there’s almost 100% price transparency, you need to compete on price. That’s how you sell more. And in the meantime, you seize every little opportunity to improve profitability.
Get Greater Control Over Your Price Positioning
I know, it’s impossible to offer the cheapest deal on everything you sell.
But you can still compete with the giants and thrive if you learn how to pick your battles wisely and drop unprofitable products.
Pick Your Battles Wisely
If you pick your battles wisely, you can get and stay competitive, and concurrently drive traffic to your store.
So first of all, you can—and should—offer competitive deals on popular products in your store. It’s a great smart competitive tactic that helps you benefit from comparison shopping engines like Google Shopping, Bizrate in the US, or idealo in Germany, etc.
These websites are among the most visited, and they’re an important source of traffic for you. By offering the best deals on popular products, you’re appearing at the top of any list like the one below.
This way, all those visitors who’ve never heard of your store suddenly see it for the first time. And the more popular an item is, the more it’ll increase your visibility.
Ultimately, those shoppers who get used to seeing good deals over and over will turn to your store for more.
Drop Unprofitable Products
If you haven’t started tracking your competitors’ prices yet, you’ll be surprised how much information you’re missing out on. Information that’ll help you understand your strengths and weaknesses.
Take your relationship with your suppliers. Some suppliers give you volume discounts, special deals, etc. During the holiday season, some even give you extra discounts to help you boost sales.
And some obviously don’t.
When you monitor your competitors for a while, you notice that some products are too costly for you. Your selling price is always over others’ and you’re not selling enough.
Do you insist on selling those unprofitable products, or you rather save the space for ones that are actually selling?
Personalise Your Offers
These days, keeping customers is harder than finding them in the first place.
36% of shoppers reported shopping more with new brands this year, 45% said they’re less loyal to brands they like.
For an SMB, that means more shoppers will try their brand if they play it right—remember picking your battles?—but they must work more on keeping them.
And one great business philosophy is giving customers what they want and need. 91% of shoppers are more likely to shop with brands that offer relevant deals and recommendations and remember their preferences.
Of course, data will assist you in understanding your customers.
To anticipate what your customers are interested in, you can track:
- Previous purchasing history
- Buying frequency
- Average basket size
- Items put in the wish list
- Items abandoned in the cart
- Previously used discounts and coupons (type and amount)
- Browsing history
So instead of offering blanket discounts—which destroy value and diminish profit margins—, you can send out personalised codes to your customers.
With customer data at hand, you can offer your shoppers a discount that’s truly enticing on an item they’re actually interested in.
For instance, if a customer has only bought from you using discounts over 50%, they might be indifferent to a 25% off sale.
Another might be perfectly happy to use a 25% off coupon, though.
Believe it or not, people often react differently to a sign that says ‘two-pack bundle for 50% off’, and one that says ‘buy one get one free’.
What I mean is that your customers have different preferences and needs, different spending habits, and budgets. Instead of targeting all those different people with generic email campaigns, learn more about them and personalise your offers.
Anyone can build an online store from scratch with very little effort and investment. The challenge is finding out how to stand out from the crowd.
Every business has strengths and weaknesses. The key to success is playing to your strengths and overcoming your weaknesses.
And data-driven smart competitive tactics we’ve covered will help you do that. You need to invest some of your time and resources into data gathering, analysis, and implementation.
Data will also help you make agile decisions, so you can take every opportunity to improve profitability.
About the Author
Basak Saricayir is a content marketer at Prisync, a price tracking and dynamic pricing tool that helps eCommerce companies increase sales and maximise profits.