Sophie

16.11.2023

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6 reasons why merchants should conduct a market price analysis

1. Competitive pricing

The price and thus visibility are two of the most important factors influencing customers' purchasing decisions. Through market price analyses, retailers can check their prices against the competition and ensure they do not lose potential customers to competitors with cheaper offers.

When listed on price comparison engines and marketplaces, high-priced offers naturally move to the back of the overview pages. They are perceived as „expensive“ by potential customers and consequently receive fewer clicks. Here, optimized pricing helps ensure that products move higher up in the ranking even with price reductions in the cent range, thereby achieving higher click-through rates and sales.

2. Profit maximization

Skillful pricing based on market price analyses can have a significant impact on maximizing profit. Especially in combination with other query options such as availability or delivery times. Buyers on price comparison engines like idealo, cheaper.de or Check24 typically to the lowest price, which is why shops often optimize their prices downward to get better listings. However, market price analysis can also be helpful for price increases. This allows for an increase in the profit margin without deterring potential buyers.

In competition on price search engines and other sales channels, merchants also see how much they can raise their prices compared to the second-place shop in order to achieve an increase in profit. On price search engines, for example, the formula “always one euro cheaper than the second-place shop” can ensure that no margin is given away because the products are generally priced too low.

3. Inventory Management

Market price analyses are also helpful for the effective management of inventory. For example, if the demand for products increases seasonally due to a sale, online shops can take targeted pricing measures to reduce their own inventory of these products. This helps to optimize storage costs and use the available space efficiently.

Unlike seasonal reductions, prices can also be raised if the market situation allows it. If a competitor no longer has a certain product in stock or long delivery times are to be expected, an online store can increase prices if there is high demand for this product on the customer side. This flexible pricing strategy makes it possible to maximize profit from the current market situation.

4. Adaptation to market changes

Markets are in a constant state of flux: new competitors emerge, seasonal product ranges change, and consumer demand fluctuates. Continuous market price analysis enables online shops to adapt quickly to these changes and adjust their strategies accordingly.

For example, if a new competitor enters the market and offers aggressively low prices, a retailer can respond by reviewing its pricing and potentially making strategic adjustments to remain competitive. This is particularly important because quickly adapting to market changes helps secure market position and ensure long-term success.

5. Improving customer loyalty

Reasonable pricing based on careful market price analysis can not only increase profits, but also significantly improve customer loyalty. Customers tend to shop at online stores that offer fair and competitive prices.

Delivery costs and delivery times can also be used as competitive advantages. However, regarding delivery times, the rule is to only offer timeframes that can actually be met, because reliability in delivery is an aspect that customers greatly appreciate.

6. Overview for manufacturers and brands

Not only online shops benefit from a strategic market price analysis. Manufacturers and brands also have the opportunity to monitor compliance with contractual agreements with their retailers. This includes, for example, the listing of products on agreed channels. Likewise, it is possible to track whether shops adhere to the RRP in their pricing or potentially offer products too cheaply.

Conclusion: Market price analysis is not just „nice to have“!

In summary, market price analysis is crucial for online shops, regardless of whether the products are offered on price comparison sites, marketplaces, or other online channels. It makes it possible to set competitive prices, maximize profit, manage inventory, adapt to market changes, and strengthen customer loyalty.

Furthermore, the raw data obtained from the analysis serve as a very good foundation for creating reports for various units within the company. With this data, purchasing can make strategically sound decisions, for example regarding new products for the assortment. Likewise, this data can serve as a basis for dynamic repricing in the company's own online shop in order to reflect the situation of different sales channels.

All of these examples clearly show one thing: a market price analysis is by no means just a „nice to have,“ but rather an essential strategic tool in strategic e-commerce operations.

With the market price analysis from Channel Pilot Pro, retailers and brands easily get a national and international market overview of over 75 platforms in 30 countries for products on a GTIN/EAN basis.

Product prices, availabilities, shipping costs, delivery times, reviews, own prices, and own rankings can be queried multiple times a day in Channel Pilot Pro. This means that retailers, manufacturers, and brands always have a complete overview of the market situation and can react accordingly at any time, or configure Channel Pilot Pro to automatically control processes based on specific criteria. The data obtained is summarized in clear and easily understandable reports to immediately reveal margin and sales potentials in the online store.