Introduction
As an eCommerce retailer, your goal is strategically pricing and promoting products to beat the competition and drive sales.
But in today’s data-driven retail landscape, you can’t just guess at “smart” pricing. You need clear visibility into what competitors are doing.
How else can you know if your prices truly align with market rates? Or accurately identify opportunities to undercut competitor sales and promotions? The key is having rock-solid product matching capabilities.
With precise matching, you can benchmark prices against identical items from rivals. You can surface where you are over or underpriced versus the competition. You can monitor competitor pricing and react quickly when they misstep.
Without accurate matching, it’s impossible to leverage these kinds of competitive pricing strategies at scale. You’d only be making assumptions and best guesses.
Let’s look at how implementing bulletproof product matching can supercharge your competitive intelligence. With these capabilities in place, you’ll find new ways to outsmart the competition and dominate through smarter pricing.
What is product matching?
Product matching is the process of finding the same or equivalent products sold by competitors. In eCommerce, retailers use product matching to identify identical or very similar items that other merchants have listed online.
For example, if one merchant sells a particular type of shirt in several sizes and colors, this same product could be found on another platform or website. This process helps retailers stay competitive by offering competitive prices for similar items.
Accurate product matches let you analyse competitor pricing, stock levels, reviews, etc. You can then use these insights to drive your pricing and supply chain decisions - which, in eCommerce, can make all the difference between losing and making a sale.
How does product matching work in eCommerce?
While product matching is part of any sales process, eCommerce in particular relies heavily on accurate product matching algorithms. These algorithms are designed to quickly and accurately identify exact or closely-matched products across multiple platforms.
To get started with product matching, you need a list of the products in your catalogue. This includes key details like:
- Product name: The name used to indicate the product in your catalogue.
- Brand name: The brand associated with the product.
- GTIN/barcode: The global trade item number associated with the product.
- Category: The general category of products that the item falls under.
- Any supplementary info like color, size, etc.
By collating this product data, you can search for matches on Google Shopping, Amazon, and other major eCommerce platforms. The more detail you have, the higher your chance of finding accurate matching products - which makes a robust product-matching strategy that much more effective.
Many retailers do this manually at first. But with thousands of products, it becomes tedious and error-prone. Not to mention manual work like this can quickly overwhelm you and put you behind schedule.
Thankfully, there are product matching software solutions (as used by automated price tracking tools), that automate the process and make it easier to manage your data. These programs help you identify products from hundreds of sources, cleanse duplicate records, and flag mismatched results - all in one go!
The importance of product matching for competitive pricing strategies
At its core, competitive pricing means strategically setting your prices based on what competitors charge for the same items. You need apples-to-apples matching to do this right.
If you mistakenly compare your pricing to a lower-quality product, you could undervalue your merchandise. Conversely, if you match incorrectly to a superior product, you may price yourself out of the market altogether.
How inaccurate matching distorts pricing insights
Let's walk through an example:
You sell a best-selling Bluetooth speaker for £100. During product matching, you incorrectly determine a competitor is selling an identical speaker for £75.
At first glance, you may think you need to lower your price to compete. But in reality, their £75 product is an older, inferior model with worse sound quality.
In this scenario, inaccurate product matching leads you to draw flawed conclusions about the competitive landscape. You may either underprice your offering or decide against any needed price increases because you believe competitors are cheaper than they really are.
The ripple effects of flawed matching
The implications of poor matching go beyond pricing strategy too. If you believe a high-demand product is widely available from competitors, you may miss out on sales opportunities.
Without a true understanding of competitors' assortment and stock levels, you can't capitalise on gaps in product availability.
Inaccurate matching also feeds misinformation downstream to other teams. Marketing spend and promo budget decisions get skewed. Forecasting and inventory planning over (or under) buy. You may overpay vendors if you believe retail prices are lower than reality.
How strong matching powers pricing success
The most pricing-savvy retailers invest heavily in bulletproof product matching for good reason. With precise matching in place, you can:
- Confidently benchmark pricing against identical products.
- Surface competitive gaps where you are over or underpriced.
- Identify price positioning sweet spots within a product category.
- Know precisely which competitors to prioritise monitoring.
- Inform when and how low to go with sales and promo pricing.
- Anchor vendor negotiations with real-world competitive pricing knowledge.
Solid product matching provides the foundation for impactful, data-driven pricing strategies. It's impossible to unlock the full benefits of competitive intelligence without accurate matching in place first.
Product matching in Amazon: How it differs from other eCommerce platforms
Amazon makes extensive use of product matching to connect its listings with identical items. This powers the "Other sellers on Amazon" section you’ve likely seen on many product pages.
While Amazon keeps its matching process private, it’s likely they utilise a similar algorithmic data-driven process that combines catalogue data, images, text analysis, and other signals. As you can imagine, this is easier for them since they already have rich internal data on cross-referenced products.
On other eCommerce sites, you typically rely on publicly visible information like product titles, images, descriptions, and barcodes. Limited access to internal product databases makes third-party matching more complicated - and more critical.
How machine learning is used in accurate product matching
To match products at scale, machine learning (ML) has become the go-to solution. ML algorithms can process thousands of products faster and more accurately than humans.
The two main approaches are:
Rules-based: Hardcoded rules that match based on certain conditions - e.g., if titles are identical. This approach works well for simple matching tasks but has its limitations.
ML models: Trained on labeled data of matched/unmatched products to recognise patterns. This approach is more versatile and can work for extensive datasets.
Usually, a hybrid approach works best. The rules account for new information, and the ML model can provide quicker, more accurate results. This is especially important for large datasets when manual curation is too time-consuming.
How does product matching affect pricing strategies?
Product matching has become the fuel that powers data-driven pricing strategies for modern eCommerce retailers. With accurate cross-merchant data, merchants can make smarter pricing decisions and outmaneuver the competition.
Benchmark against real market prices
Precise product matching enables accurate benchmarking of competitive pricing. Rather than guesswork, you can compare your prices against real-world data for identical items.
Knowing the exact price positioning of rivals helps answer questions like:
- How does my pricing stack up for key products?
- Are we over/underpriced versus competitors?
- Who has the most aggressive pricing in certain categories?
With benchmarking, you can confidently set prices based on true market rates rather than assumptions.
Optimise your price gaps
Analytics on matched products also reveal price gaps where you are over or underpriced relative to the competition.
You can catch cases where your prices are too high, risking lost conversions. Or identify the excess margin left on the table where you could be priced higher.
Optimising these price gaps lets you find pricing sweet spots - high enough to maximise profits and low enough to stay competitive.
Monitor competitor price changes
Ongoing product matching enables continuous monitoring of competitors' pricing fluctuations.
With pricing trends over time, you can spot opportunities to undercut competitor price hikes. Or quickly react when a rival drops prices by matching or going even lower.
This level of pricing agility is only possible with the real-time intelligence enabled by product matching.
Inform promotional and sales pricing
Lastly, product matching informs smarter promotional pricing decisions. You can strategically set sale prices based on true competitive rates rather than guesses.
Knowing rivals' everyday and discounted prices means you can time sales to undercut competitors. Or avoid unnecessarily deep discounts that hurt margins.
Frequent product matching means you can adjust pricing faster too, using Dynamic Pricing tools. This agility helps you stay competitive in the dynamic eCommerce space.
The benefits of accurate product matching for eCommerce retailers
Getting product matching right delivers plenty of advantages for online retailers:
Better pricing decisions
As discussed earlier, accurate matching enables data-driven pricing based on real market rates rather than assumptions. Merchants can confidently set prices, knowing they are benchmarked against identical products.
Surface missed conversion opportunities
Product matching also highlights cases where incorrect pricing likely leads to lost conversions. If your prices are consistently higher than all competitors for the same items, you can surface where uncompetitive pricing is costing you sales.
Identify excess margin
Analysing matched pricing may reveal excess margin in specific product categories. This shows areas where you could reduce pricing to be more competitive without sacrificing profit margins.
Boost sales through targeted promotions
When you know competitor pricing in detail, you can precisely time promotional pricing to undercut rivals. Targeted sales and coupons based on product matching intelligence result in more temporary “conquesting” of competitors' customers.
Improved SEO through pricing alignment
Pricing alignment with the market also helps avoid issues with Google. Large systematic price gaps on identical items can sometimes be interpreted as price gouging or misrepresentation. Keeping pricing aligned helps maintain quality scores.
Foundational for modern eCommerce merchandising
These advantages combine to make accurate matching a foundation of any advanced eCommerce merchandising operation. Without it, you’re missing the cross-merchant intelligence needed to optimise pricing, assortment, promotions, forecasting, and more. Matching unlocks a world of potential insights.
The future of product matching and eCommerce retail
So, what does the future of product matching look like as digital solutions and AI technologies continue to evolve? It’s likely to exponentially increase in accuracy, speed, and range of capabilities.
At the same time, it’s also likely to become more complex as retailers wrestle with ever-changing product data formats, integrations, and regulations. This will make it even more important for retailers to have a grasp on the advantages and nuances of different product-matching solutions.
We can expect retailers of all sizes to tap into cross-merchant intelligence to optimise their eCommerce operations - taking advantage of different key data points and product attributes to make the most precise decisions for their business. This could mean everything from improving pricing competitiveness to achieving a higher conversion rate.
And here’s the reality – as more and more online shoppers continue to demand faster delivery times for their orders, product-matching solutions will be integral to retailers’ success. This means that merchants will need to understand the capabilities of their product-matching solutions and the associated data points and regulations related to them.
Find your product-matching solution - and more - with BlackCurve
Product matching is no longer a nice feature to consider. It’s a necessary tool for success in today’s market. Effective product matching provides the foundation for competitive pricing, assortment optimisation, marketing analytics, and more.
While historically a manual task, ML has made large-scale automated matching a reality. For eCommerce merchants, embracing this technology can significantly boost sales, margins, and competitive advantage. The data is out there; product matching makes it accessible.
Do you want to learn more about utilising product matching and other key tools to gain a competitive edge? Check out BlackCurve’s industry-leading eCommerce pricing solutions and see how we can turn your data into insight. Let us help you make the most of your products and take your business to new heights.