Why do online shops use automated price tracking solutions?
What affects online shoppers’ decisions the most? What makes them choose to buy a particular product in a particular store and not decide to shop elsewhere? Nowadays retailers offer us practically the same products. This is best seen in FMCG products and electronics. The analysis for the report “Trends in the electronics and household appliances market” shows that on average about 20 retailers in Germany offer the same products.
In such cases, does price matter most to shoppers? As you would guess, it is one of the most important factors influencing the choice of a given store. That is why every seller who wants to be competitive should control prices of his opponents all the time. The ideal solution for this is competitor price tracking software.
Price tracking – why is it so important?
Although it may come as a surprise, large online stores spend hundreds of thousands of dollars on news about what prices they and their competitors have. They are able to spend vicious amounts of money on this information because price is the most important factor of choice among consumers. Since the popularity of online shopping has increased this factor is even more evident. It is easier for us to compare prices in different stores by doing everything through the computer and sorting the results of the product we are looking for from the lowest price. The buyer of a product is not likely to choose a store that is ranked fifth or tenth, but will decide to shop at the cheapest store.
Because sellers are aware of how buyers shop, they are increasingly choosing to use price tracking tools to keep their prices in line with the market. The use of such methods helps to lower prices and to always be first in line. As you can see in the figure below, this works best when you constantly monitor all prices. Sometimes a small change in price can implement significant increases in margins and profits for the seller.
Manual competitor price tracking
Previously, manual competitor price tracking was most commonly used, but with the increase in products as well as stores offering sales, this is virtually impossible. In e-commerce every price change would have to mean visiting the competitor’s website.The dynamics of price changes is very high, e.g. Amazon generates even one million changes every day. As we can read in the trends report, an average product can change its price even more than once a day. This means that manual price comparison will be very difficult. As you can see in the graphic below the number of competing offers can be really high.
In Germany, for example, an average of 17,000 offers should be analyzed to get a full picture of the situation. It is hard to imagine how much time this would take. This is why automatic solutions are so convenient.
Competitor price tracking software
Competitor price tracking software, otherwise known as competitor price monitoring tool is a helpful device that allows you to arrange data and extract the necessary information. After choosing the website you want to analyze, you also choose the products and get a very clear presentation of the market situation. Below you can see an example of price comparison for different stores.
How does competitor price tracking software work?
Competitor price tracking software gathers data about prices from the market. It is based on 3 main steps:
- Data crawling
- Data matching
- Data presentation
Data crawling means when data is gathered from different sources with the data crawling mechanisms. Algorithms that are used to track prices are developed and continually improved by developers’ teams to make sure data quality is on the highest level.
Data matching is based on Machine Learning suggestions and manual verification, crawled data about prices is matched with proper products.
Data presentation is when all the gathered data is presented in an online panel so that users can compare their prices with competitors in an intuitive way. Data is shown on charts as well.
Thanks to all these features the users of price monitoring software save a lot of time and all data is clear, but most importantly it is updated even several times a day. It is possible thanks to good quality data to change prices in order to match the prices of the competition and always get the highest margin.
Why use price monitoring software? Summary
Tracking prices in a dynamic e-commerce market is an essential factor to use if you want to be a top seller. Using price monitoring software will help you not only to gather data faster but also to analyze it accurately and it will be a cheaper way to make comparisons. All you need to do is to have a list of interesting products and competitive sites and leave the rest to us.
