Pinterest is full of motivational quotes exhorting people to “run their own race.” TV talk show host Oprah Winfrey, author Robin Sharma, and hip hop artist LeCrea remind us to stop comparing ourselves to others. We’re told that thoroughbreds wear blinders when they race, so they focus on the finish line rather than the horses around them.
While that advice may work for people’s personal life, far too many retail executives apply it to their business as well. Taking your finger off the pulse of your competitors’ pricing can be detrimental, and yet, we’ve talked to numerous pricing managers over the years who don’t include competitor price checks as part of their daily routine.
Over the past few years we’ve seen online consumer behavior change. When they want to make a purchase, they check multiple vendors on their customer journey, comparing prices, shipping terms, service levels, and warranty information. If your customers have more information about the market than you do, it’s difficult to present your best, most compelling offer when they arrive on site.
Here are four more reasons you should be checking your competitor’s pricing every day.
Checking prices daily can give you a much better understanding of the competitive environment. By checking four or five of your key competitors, including Amazon, you can get a feel for the daily, incremental changes that are coming to your market.
You’ll be ahead of the curve when it comes to promotions and offers, allowing you to adjust your prices accordingly if you see sales numbers change as a result of your competitive environment.
Understanding Pricing Strategy
When you monitor and track competitor pricing, you can get a deeper understanding of the strategy other retailers like you are employing. Over time, you can see how the pricing of one retailer leads to a chain reaction in prices across your competitive environment. As you get a clearer picture of the strategies employed by others, you can adjust your own strategy to beat them at their own game.
Accelerate Pricing Changes
The speed of business is increasingly fast. Retailers that occasionally check competitor prices risk falling behind. However, for those who stay on top of the market, they have a great view into the way the market is evolving. They can adjust prices as needed and publish enticing offers that motivate customers to buy.
If you’re planning on promoting a TV on your homepage and find that your competitors have the same TV at a lower price, you can react to their lower price. One option would be to lower your price to undercut your competitors. A second option would be to keep your price, but add value-added services, such as an extended warranty period or coupon codes for free downloads. Alternatively, you can promote a different TV where your offer is more compelling to that of the competition. However, you only have those options if you check your competitors’ offerings.
Checking Prices is Easier Than Ever
Technology has made it easier than ever to monitor your competitors’ pricing changes for everything you sell. Computer systems trawl through sites, capturing and reporting pricing information. With information in hand, you have the tools you need to compete effectively.