It is all about the price; not only because of shopping tourism beyond the Swiss borders. The price is in the spotlight – be it for corporates, be it for consumers. 9 out of 10 corporates blame competitors for price decline. Despite 3 out of 4 corporates change prices mainly driven by the own cost structure. Take command for your prices.
Are you in a price war?
In the beginning of the year there are green lights ahead when it comes to budget and EBIT margin. Surely the price of any given product is fundamental: The most crucial factors for online shoppers are the price and the experiences made with a webshop. No doubt about that as shopping tourism beyond the Swiss borders proves. Closely followed by the product itself and delivery conditions. Corporates are just as focussed on the pricing, as they exactly know the huge exponential impact of a 1% price increase on EBIT margin. With price strategy comes complex dependencies. Thus 9 out of 10 German corporates blame the competitors for the price spiral in their industry. When it comes to price changes corporates are often not focussed on competitors: 73% adapt prices particularly when they have to due to their own cost structure.
Position price radar
The question begs to be asked, what radars corporates count on to capture competitors’ price strategy. Only 1 out of 3 German companies has a specific IT infrastructure for its pricing in place. All the others need eagle eyes. A lot of corporates still invest precious resources in a manual monitoring for a fraction of the competitors’ prices. Thus it is not surprising, that only 16% of corporates change at least once their discounts to new market forces.
Do you always come up with the right answer to the competitors’ prices? With the e-business comes an almost 100% price transparency. The solid data base helps to enhance the own price strategy assuming one has the capacity to monitor and analyze the huge amount of numbers. Dynamic Pricing is the talk of the town. The days when only airlines had flickering prices are gone: More and more corporates join in and go for volatile prices. Anybody who googles Dynamic Pricing knows the ads: "Optimize your turn overs, margin and price” it says or “Analyse a billion product data!”.
There is help
Here Quicklizard comes into play. The company offers dynamic analysis, monitoring and dynamic pricing since 2011. Quicklizard knows each and every virtual price tag and brings them into a clear overview. Quicklizard goes further than just comparing competitors’ prices. Quicklizard comes up with price recommendations based on shifts of market and consumer behaviour. Basically discounts and empty stocks of competitors are recognized in real-time based on page views and conversion. Algorithms known from stock exchange replace manual, fractional price analysis. With Quicklizard corporates have the whole catalog on the radar and just act in seconds. Dynamic pricing rules help to act even faster. Rules like: I always want to have a price 5% below the cheapest competitor. Or: I want to increase the price by 10% as soon as the competitor’s stock is empty. In fact Quicklizard raises the bar massively for price analysis and monitoring compared to manual work as Quicklizard automatically defines the most profitable price for each and every product.
Are you in a price war? 58% of German corporates state that.
Click here for further information about Quicklizard.
List of references:
1 Global Pricing Study 2014, Simon-Kucher & Partner, June 2014
2 Pricing study, PwC Deutschland, December 2013
3 Imagetreiber für Online-Shops, E-Commerce-Center Handel, Institut für Handelsforschung, October 2010