I would like to learn e-commerce owners' thoughts towards this topic.
How do you define your e-commerce pricing strategy? Are you focusing on competitor price
tracking? Do you change your prices according to the price change of competitors?
How do you track your competitors' prices? Manually? Or, using a software?
This is a bit controversial, but I don’t give a crap about my competitors!
I focus on delivering a great product, a great service, and being top of mind.
If you battle on pricing, you’re entering a rat race.
When initially setting my price, I do look at competitors to understand the market and then usually price a bit above.
Then I establish what my CPA or cost per acquisition will be, and adjust accordingly.
This helps me 1/ control my profits and 2/ quickly identify which products are most worth my time/money/energy.
If you want to do some initial research on pricing, Prisync is a popular tool but a bit pricy. You can do this through Google sheets for free, and is sometimes a better option when you're in a new market (so you spend time researching & understanding the space).
Depending on how big your competitors are though, they may not have actually reached a truly optimized price. Once you do your initial research, rather than obsessing on pricing, you should focus on:
1/ Establishing a brand.
People don’t buy Nike because they have the cheapest shoes. They buy Nike because of what they stand for and the relationship they have with the brand.
2/ Deliver superb products and services
Ask yourself this, what do you want to be known for?
Discount products? Or a premium e-commerce brand that loves their customers and will do whatever it takes to make customers happy?
Average Order Value, Returning customers and Word Of Mouth/reviews are the life blood of any ecommerce store.
If you skimp on product or service - you're doomed. You will see very few returning customers and negative feedback..
But if you deliver a great experience, you'll see customers come back and tell their friends about you.. Even if you have higher prices than your competitors.. (Go look at the top ecommerce companies, very aggressively compete on pricing.. its a losing battle.)
If you’re confident in your customers and what they’d say about you right now, start using a review app like Yotpo to show off happy customers. Visitors will spend less time looking at the price tag, and more time looking at all of your happy customers.
3/ Always be top of mind (to your customers)
I was just about to go to walgreens to grab my daily lunch.. Right before I left, I saw a Subway ad on instagram.
It showed off a delicious turkey sandwich on Italian herb and cheese bread topped with all of my favorite veggies.
Guess where I went for lunch in a few minutes?
Did Subway worry about pricing lower than Walgreens?
Not one bit. But I don’t care. They were in the right place at the right time and I’m sold.
Social media is the perfect way to stay extremely relevant to your market and be top of mind (rather than your competitors). You should be all over the place: Facebook, instagram, etc.
When you have a new product, launch a campaign.
When you have a new product offering, launch a campaign.
When you want more sales, launch a campaign.
If you do this, you will realize how less impactful pricing actually is and realize how important it is to be present in the right place, at the right time.
There are only a few expections for this, like if you’re selling on amazon for example. In this case, you’re literally listed right next to your competitors and pricing matters a ton.
But if you’re a shopify store - and think you have the marketing chops - consider getting more active on social media and running some ads.
We use the shopify app Turbo to help stay super relevant and drive mini floods of sales when we need them.
They have really nice campaign templates for Facebook and Instagram ads that anyone can use and be successful with. They have campaigns for most of the scenarios from above.
Here’s the app on the shopify store if want to try: apps.shopify.com/turbo-retargeting
As you can see, depending on what & where your selling, you don’t always need to obsess over pricing.
It’s called a market for a reason and unless you want to be a discount brand, you shouldn’t always be the most “competitively priced”.
A healthy dose of market analysis is important but don’t obsess over it! That is just my opinion.
Hope this helps and look forward to other thoughts.
My name is Jade, I am with the Social Care Team at Shopify.
In my experience, I have seen many physical and online stores manually check their compeditors prices to keep their business on the same page. This process can bit very time consuming, especially when doing it on a regular basis. I found an app in the Shopify App Store called Price Mole that may help! In the reviews section, you can click on the businesses that use the app and even contact them on their website to find out how they are liking it.
Best wishes with your search!
Jade | Social Care
I have been using an app called Prisync for a couple of years now and they have been a tremendous help in this exact need. They will work with you to help get everything working perfectly and also do a fantastic job in understanding the needs of online businesses.
Thanks. How many products do you have to track?
Actually, I have more than 1500 products in my store but I can focus on my top-performing 500 products. Also I have 5 main competitors, so it makes around 2500 URLs to check.
In that scenario, it is almost impossible to check it manually. If I do so, finding time for another issues becomes a struggle for me.
Also, thank you both for advising me these two solutions. I will both check Prisync and PriceMole.
Monitoring competitor pricing by analysing data by hand is a very slow process that takes so much time and does not produce precise results.
If you want the best Software in the market that helps you track all product prices of your competitors and compare them to yours and even get more analytical, intelligent data that will help you stay on the edge then I would recommend using the Sniffie service since it´s an expert in the field and a trusted Finnish technology leader.