With rising inflation costs showing no signs of curtailing anytime soon, businesses catering directly to consumers have begun to panic. Most retail, eCommerce, and food & beverage industries are starting to feel the stress to stay profitable, and for some, afloat. For online businesses, eCommerce competitor price monitoring can provide several advantages to learning how other brands cope with inflation and what strategies they deploy.
Not all companies are buckling to this rising inflation pressure; Most corporate giants rely on other measures – pay cuts, workforce reductions, shrinkflation tactics, and squeezing suppliers to their limits. For example, most of Amazon’s subsidiaries can run on a perpetual loss model as the entities are not looking to make revenue but penetrate the market with their products and establish a loyal customer base.
In the past weeks, a staggering number of companies have announced layoffs and a hiring freeze, and the numbers are projected to climb in the upcoming months. Smaller businesses that cannot resort to such drastic tactics, must rely on smart approaches to continue operating and generate income. Therein lies the answer – companies must be agile and quickly adapt to these changing times by keeping a close eye on their competitors and following tactics that set them up to win.
Benchmarking & Auditing
The first step to coping with any unforeseen changes is to benchmark your company with peers and other players in the industry. Benchmarking can highlight existing gaps and show numerous areas for improvement. By understanding where the organization stands and its shortcomings, processes to boost efficiency can be implemented.
When the market is not under stress, companies can get by without lean operations as they are not competing tooth-and-nail for the customers’ attention. It’s only when the economy is under duress, every aspect of the internal processes, expenses, inefficiencies, and wastage of resources must be looked at through a magnifying lens.
Auditing the business is the next course of action. Every retailer must know how much it costs them to make/buy their product at present. Sifting through past invoices to see the price fluctuations in materials and services is necessary to take any action. With that data in hand, companies can decide if they can shave the costs of their product – supplies, packaging, design elements – without altering its quality or compromising on the brand’s integrity. It can be a tough call to make, but necessary depending on the direness of the situation.
Brands can also choose to stay competitive on high-demand items or bestsellers while costs can be increased on products less popular. This approach ensures that customers won’t be put off by higher costs for items they regularly purchase while the company adjusts for inflation via other goods provided.
The audit carries on to the final step of talking to customers and performing sentiment analysis. Knowing your audience and how they feel about your brand is so important, especially for small businesses. These conversations can provide a better understanding of the audience you cater to and provide decisive insights for the next steps.
eCommerce Price Analysis
Understanding the reason behind the price inflation of products is vital to compete in this market. Retailers cannot blindly accept a price change without doing their research first. Every aspect of the product must be under scrutiny – the cost of the raw materials, manufacturing, storage, transportation, the suppliers’ cut, and the retailers’ profit margins. This data must be compared to the past year-on-year’s inflation to see if the price increase is reasonable.
Investing in an eCommerce price comparison tool can help gauge market prices for similar products and see variations in product details. Access to this data can prevent businesses from overvaluing or undervaluing their items which puts them at a disadvantage. A market intelligence tool helps make sound choices rooted in facts to avoid bad decision-making that can have major repercussions.
eCommerce Pricing Strategies
Fluctuations in commodity prices with an insight tool can be easy to track. To build a well-planned pricing strategy, brands must deep dive into consumer preferences and optimize product pricing to match market practices. A recent study by Ipsos showed that 42 percent of customers will buy more on promotion and 35 percent of customers will buy cheaper brands to deal with inflation.
By devising a competitive pricing model – incorporating price variations, promotions, and sales – based on granular data obtained from an eCommerce insight platform such as 42 Signals, immediate measures can be implemented when modifications on competitors’ websites are detected.
An eCommerce insight tool can anticipate consumer demand, track competition, optimize digital shelves, and grow online sales. In the current climate, retailers need any and every competitive edge they can get to keep their heads above water. When the market is flooded on the supply side, the demand side gets pickier and more selective.
Customers nowadays are spoilt for choices with an endless assortment of brands selling similar products. The biggest lasting advantage of an eCommerce company is to leverage actionable insights through digital shelf analytics that helps grow the business.
To learn more about eCommerce insights and for a demo on the 42 Signals product, please contact email@example.com