The global pandemic is producing "extreme market dynamics". In some markets, demand is skyrocketing and companies are struggling to keep up. At the same time, demand for many other goods has all but dried up: who wants to buy the latest summer fashion if you've nowhere to show them off?This is all good news if you are selling products in high demand but what if you are trying to sell goods in a market where sales growth remains weak yet you are facing rising costs from implementing social distancing measures, protective equipment and rising import prices? Market trends, social movements, regulations and competitors’ performance all affect customer demand and have a profound effect on your prices. Some retailers may need to compensate with extra promotions to remain afloat. At the very least, they have to remain competitive. So, what should your prices be doing right now to help your company weather the current uncertain times?
To stay competitive, retailers should be tweaking prices of products on a regular basis based on factors that could include time of day, demand, location, competition and customer buying patterns. It's called Dynamic Pricing - in case you didn't know! The end goal is to personalise pricing and capture consumers’ maximum willingness-to-pay for a product.
Online retailers are finding it increasingly important to experiment with dynamic pricing based on a range of objectives: acquisition, retention, and winning business away from competitors. For a smart, dynamic pricing strategy to be most effective however you must not lose sight of your objectives and, what you strenuously need to avoid at all costs, is a price war. A price-matching guarantee with competitors can relieve some of the pressure and give customers additional comfort and trust.
Another way retailers can get around any negative perception is allowing for dynamic discounting, which offers personalised discounts depending on customer data. A dynamic pricing system can also access the amount of inventory you have available in real-time and will automatically apply discounts if necessary.
If you are setting the optimum price for every product in your inventory then you will unquestionably be selling more, which leads to prolonged business growth and, if appropriate, even allows you to increase your inventory size by up to 5%.
Managing a Large Inventory
Don’t just take our word for it. Chris Reid, Managing Director at Appliance House (and a customer for over 2 years) says “The software can handle complex pricing rules by brand, category, product and competitor. Anything it can't handle out of the box the BlackCurve team are on hand to make sure it works the way you need it to.”
Appliance House is an online retailer providing appliances, sinks, taps and accessories for kitchens, bathrooms and around the home. The challenge was that as their online business was growing rapidly with over 3,000 products in their inventory, the company wanted to be able to offer a credible marketing message that their prices were competitive, something not possible without an automated solution.
Appliance House selected BlackCurve to be their competitor pricing data provider and price optimisation solution. The Rules Engine was configured with a competitor led pricing strategy, alongside minimum margin safeguards. BlackCurve continues to check the price of Appliance House’s entire inventory against competitors on a daily basis and make automated price changes in line with their pricing rules. The A.I. Engine also set optimum prices for other products not currently being sold by their competitors.
As Chris Reid says “The onboarding was straightforward and we were soon live. It has freed up a lot of time previously spent manually repricing products that had to be looked at daily to stay ahead. It gives back your precious time.”
Why not see how BlackCurve can help your eCommerce company by booking a chat with us today? At BlackCurve, we can manage your prices and so much more.