Before we discuss WHO needs market price benchmarking, let’s first address WHY it is so pivotal. No retail business, whether online or in-store, is an island. In order to gain the traction to succeed, it is crucial to understand where your products’ prices stand in relationship to your competitors’.
Market price benchmarking provides invaluable insight into several key issues: Where do your prices fall – are they above or below the average market price? What are your customers looking for and what kind of experience do they undergo in your shop? What makes your direct and indirect competitors’ offering appealing? Where can you fill in gaps that your competitors are missing?
Now that we understand why price benchmarking is vital, let’s see who can best profit from using this type of analysis:
Price Benchmarking for Online Enterprises
Online enterprises must constantly gauge the competition in order to gain an edge and boost sales. This process sounds easier than it actually is. Product prices are constantly fluctuating. New products are introduced to your inventory and other products are removed. Special sales are offered on competitive items. If you handle a large volume of products, keeping up with changing prices across the web is a formidable task.
While this type of task may have been handled manually in the past, businesses can now use dynamic AI-based marketing analysis platforms to gain dynamic insights into product prices across the web in real time. Online retailers can instantly add or withdraw products, or make special offers on certain items, thereby outperforming the competition and attracting customers.
Price Benchmarking for Brands
The main objective of most brands is to build a name and reputation for themselves. In order to do so, they need to offer a memorable and seamless customer experience that makes them stand out. Some brands operate their own websites, while others join a marketplace sales model.
Market price benchmarking provides insights into direct and indirect competitors, i.e, companies that sell identical or very similar products to a brand. After carefully analyzing your target audience, make your brand conspicuous by launching special offers to certain buyers on products they have purchased in the past. Use market price benchmarking to personalize your offerings and create a lasting connection with your brand.
Price Benchmarking for Marketplaces
Many marketplace owners use the commission model to claim fees from the businesses they work with. The fee may depend on whether the provider distributes products only through the marketplace or through other channels as well. Marketplaces do not want to price themselves out of the market, so in exchange for a sales spot, they should either offer lower fees or greater value to enterprises. Marketplaces also need to consider the different types of providers they host and if fees should be identical for all.
Market price benchmarking provides clear insight into all of these dilemmas: Actionable data analysis enables marketplaces to compare prices across the board, gauge the competition’s offerings, and offer top value to providers. Through price benchmarking, marketplaces can create a sustainable business model with affordable fees and mutually acceptable profit margins.
The Ultimate Winner – The Customer
Whether you are an enterprise, a brand or a marketplace, your primary goal is to engage new and veteran customers, and generate loyalty. Market price benchmarking can be combined with online catalog optimization to significantly increase traffic and streamline customer experiences.
Interested in learning more about how market price benchmarking can work for you? Book a demo.