pricing analytics in retail

Pricing Transparency in E-commerce: Its Benefits and Challenges & Use of Digital Shelf Analytics

In the realm of e-commerce, the significance of pricing transparency has grown exponentially. Many businesses are embracing this approach and leveraging digital shelf analytics to establish a solid foundation of trust and credibility with their customer base. 

Pricing transparency refers to the level of openness businesses practice by clearly displaying the costs of their products and services. It can include details regarding cost components, pricing strategies, shipping costs, third-party integrations, and any other factors that influence the final price of a product or service. 

An example of this adoption is shown in the below image. The costs for the delivery, platform fee, GST and restaurant charges are clearly mentioned in the bill details so the customer is aware of the bill breakup. 

 E-commerce Pricing Transparency and Digital Shelf Analytics

Image Source: Swiggy

In the current digital landscape, consumers are empowered with unprecedented access to a wealth of information, enabling effortless price comparisons and the pursuit of optimal bargains. In response, enterprises find themselves compelled to embrace pricing transparency as a crucial strategy for sustained competitiveness and the preservation of unwavering customer allegiance.

In this article, we’ll look at the multifaceted role of pricing transparency, its advantages and hurdles, and how the use of digital shelf analytics can be a boon to businesses. 

The Benefits of Pricing Transparency 

 E-commerce Pricing Transparency and Digital Shelf Analytics

Image Source: WallStreet Mojo

Building Trust & Credibility 

When companies openly display their pricing structures, it demonstrates their commitment to honesty and fairness. This practice can play a major role in establishing trust and helping customers understand any hidden costs they may not be aware of. Displaying transparency can be a positive sign that leads to increased loyalty to the brand and repeat business. 

Encourages Competiton 

Pricing transparency promotes competition among businesses, creating a level playing field where companies must compete based on price and quality rather than relying on opaque pricing tactics. This competition drives innovation and efficiency, ultimately benefiting consumers who enjoy lower prices and better products.

Improves Customer Experience 

Hidden pricing structures can be confusing and irritating to the consumer. Taking the above Swiggy model as an example, if the company decided not to show clear cost breakups and directly added the surplus charge of Rs. 113, the customer would be clueless and annoyed by this cost increase at checkout. By disclosing this information, the user understands what the charges are and can compare prices on Zomato or other applications, helping them find the best value for their money. 

Enhances Brand Reputation

Companies that embrace pricing transparency often enjoy a stronger brand reputation, as their commitment to openness and honesty resonates with consumers. This enhanced reputation can lead to increased brand recognition, customer advocacy, and word-of-mouth marketing.

Challenges of Pricing Transparency 

Complex Pricing Structures 

For businesses that involve complex pricing structures, transparency can be more challenging than a simple price breakdown. This may pertain to industries such as telecommunications or financial services that can be inherently complicated and interlinked with several other parties. With this obstacle, companies may struggle to communicate effectively which can lead to mistrust. 

Dynamic Pricing Structures 

Several businesses like Amazon and Flipkart include dynamic pricing strategies that involve adjusting prices based on market demand in real time. The obvious challenge in this area would be communication – how to let the consumer know the price variations and maintain transparency? It’s a tough pickle wherein the company must balance the need for flexibility and their requirement to provide clear and concise information to customers. 

Balancing Transparency with Confidentiality

While pricing transparency is essential, businesses must also protect their competitive advantage. They may need to strike a balance between transparency and confidentiality, ensuring that sensitive information remains protected while still providing enough detail to satisfy customer demands for clarity.

Discrepancies in Platforms 

Price discrepancies are a major challenge for brands that have products across multiple marketplaces usually sold by a variety of sellers. This may require mandating consistent pricing across all platforms which poses hurdles when considering different commission structures and operational costs, not to mention instances when MAP violations occur that may present more complications. 

While all of these challenges are real and require further thought, brands may have to choose between what data they can actually provide and what cannot be disclosed. Complete transparency cannot exist for all businesses. 

This may mean choosing a few pieces of information that can be shared which can add value to the customer. Even a little information can present helpful insights for the buyer and help them understand the costs better. 

The Use of Digital Shelf Analytics 

Digital shelf analytics can be a boon to businesses looking to tackle pricing transparency issues as it provides valuable insights into their product listings and pricing strategies. By analyzing data on MAP violations, competitor activity, and product availability, companies can make the right decisions that promote transparency. Here are a few ways how – 

 E-commerce Pricing Transparency and Digital Shelf Analytics

Image Source: Netrivals 

Maintaining Price Elasticity

Analyzing customer behavior and sales patterns helps businesses determine the optimal price range for their products. Price elasticity refers to identifying the level of cost fluctuations your product can incur based on changes in demand. 

This can mean discerning the right prices for the right platforms, establishing the minimum selling price, and using that to communicate transparently with customers across marketplaces. Digital shelf analytics provides platform-specific data and informs brands when breaches occur. 

Track Competitor Activity 

Most insights and the right business decisions are usually derived from competitor activity and monitoring their strategies. It allows businesses to understand what’s happening in the marketplace, and in their industry to make the right calls. 

With digital shelf analytics, companies can automatically track their rivals’ activities and adjust their pricing strategies that are in accordance with market standards. This paired with pricing transparency provides creates trust as customers know they are not being overcharged by a specific brand and see the costs involved to make the purchase. 

Detecting Price Discrepancies 

Saving the best for last, digital shelf analytics platforms can help detect price discrepancies across multiple platforms. This helps maintain consistency and avoid confusion among customers. Minimum advertised price (MAP) violations occur when authorized or unauthorized sellers go below the agreed-upon amount. This has massive repercussions as a customer may feel cheated on seeing a lower price elsewhere while finding a higher price at authorized places.


Authenticity and transparency is a requirement of the modern customer. Consumers connect more with brands that display these traits and do not display tendencies of being a soulless corporation. 

To work with new-age customers, businesses must adapt to their ways and operate in a manner that exudes these values. Pricing transparency is a step in the right direction as it promotes credibility and accountability in the eyes of consumers. These measures when implemented well can help a brand stand out from the noise and make the right impression on its target audience. 

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