Dynamic pricing for online stores

The main thing for any online store is profit, i.e. sales. To sell more you need more traffic, that is higher and higher positions in search engines, you need a usability-friendly website and of course the competitive price

A usable website is a myth? - NO!

Usability refers to the design of the site. It is necessary that in a field of view was all the necessary information, but it was not her overabundance. The main purpose is to give the customer enough information so that he would make a purchase, and not read your site as a blog with some background information. It should be logical in terms of placing buttons to select the volume, number of units, weight and, of course, the price. Nothing should take the customer away from the product page further. The product page should be organized according to the funnel principle, so that everything comes down to the sale of a particular product on this page. It is mandatory and important to have a mobile version and a language version. The client himself chooses in what language he wants to read the information. The mobile version involves adapting the content to the device on which the client is sitting, whether it's a computer, laptop or phone, in addition phone which model.

Also, the client must be offered popular products, best sellers, similar products, etc. So the customer can buy more and more!

Using the heat map of clicks you can view the behavior of people on your own resource.

Website usability tips:

• Site load speed is an important factor in order conversion and search engine rankings. There is nothing unusual, if a person is waiting a long time for the page to load, he will simply close the site at all.
• The adaptability of the site allows you to adjust all the key elements on the page for different devices and browsers, thus making the site more convenient for users.
• The convenience of ordering through the shopping cart. There should be as few mandatory fields to fill in.
• The site should have information on contacts, payment, and delivery.
• Attention should be paid to the conditions of return or exchange of goods and warranties.
• The presence of search on the site would have provided a pure output of the goods in the catalog, rather than all the information from the blog and news sections.
• The presence of reviews indicates that you are active. And if the reviews are also positive, it will double encourage customers to buy.
• The connection of IP-telephony allows you to improve the service by leveling the mistakes of managers. You will get all previous orders of each client and you can communicate with him as a sign, which will further encourage him to make an order.
• Good service means excellent service. This term should be understood to mean the comfort of the conditions under which the client places his order. Namely: sending a parcel on the day of order, the availability of several payment and delivery methods, and of course the ability to place an order over the phone. Connecting online payment will greatly speed up the process of placing orders.
• Website usability, high positions in search engines, and competitive price - it's all good! But if the customer is regular, he will want discounts and promotions. This should definitely be provided for. In the parcel, you can put discount cards and gift certificates for the next order.
• Cross-selling can significantly increase the average value of the basket. By displaying similar, recommended products to the client, or a discount on the purchase of a certain number of units, you can easily increase profits.
• The assortment on the site also plays an important role. There are always locomotive items and ancillary items. To increase sales it is necessary to look towards expanding the assortment of exact locomotive sales.
• As of January 2021, the percentage of users who visit online resources via mobile devices is about 70%. Five years ago, that percentage was 30%. In some areas, mobile traffic already exceeds 80%. The conversion rate of orders is up to 20% higher on resources adapted to the mobile interface.

Tips for promoting the site:

•     More customers - more sales. And where to get more customers? Of course in the search engines on the first positions, whether it be advertising or organic output. It is also necessary to be placed on marketplaces and bulletin boards. All these activities should be carried out with the verification of statistics in the services Google Analytics Yandex metrics and so on. It is necessary to evaluate the behavioral factor of customers. The desire to increase the flow of visitors to the site should be logical. We are talking about increasing the number of potential customers, rather than the total mass in general. This should be taken into account in contextual advertising, putting a hard targeting for the region and product groups.
• It should also be remembered that contextual advertising allows you to get an influx of customers immediately, and SEO promotion adds recognition of the resource. Thus increasing the confidence of the client in the online store and increasing the percentage of completed orders in general. Ie you need both seo promotion and advertising campaigns in search engines. Contextual advertising for the online store - this is real. An SEO website optimization - is the future. Sales yield both methods, but it is seo-promotion gives the effect of an avalanche of regular customers. As contextual advertising is often new customers. By promotion we mean writing quality content on the site, namely, product pages and news, article sections, as well as the purchase of link building. The purchase of external links can go on the principle of increasing the number and may be aimed at placing on the target resources. Content on the site should be written by all the rules of SEO with the meta tags title and description. All text should be unique, with pictures, tables, and videos.
• To promote the site successfully contribute links and comments posted in the comments on the thematic boards and otzovikah, posts, or separate topics in forums.
• Contextual advertising involves advertising in search engines in the form of text messages, placing blocks and banners on thematic similar sites, as well as product ads. Retargeting requires special attention, which allows you to "milk" potential customers.
• Contextual advertising can be displayed in search engines and partner sites, in the form of text or dynamic ads. The latter is preferable because the content of the ads will be adjusted for each client.
• You can also promote your online store on social networks and blogs. But SMM can be highly specific to different areas of online shopping. For someone, it will bring sales, and for someone, it will just bring traffic. An important parameter for promotion in social networks is the frequency of publications. Content can be minimal, but it should appear with enviable regularity and seduce customers with its attractiveness. That is, it is better to use this method of promotion for promotions, discounts, the appearance of new products, and sales.
• There is also indirect promotion of the online store through price aggregators, but it is not suitable for all areas. When selling goods with strict rrts control, it is not particularly necessary.
•  Promotion through bulletin boards is of value either at the beginning of the development of an online store or as an additional location for link mass.
• Email marketing is an interesting topic for website promotion, but it is not suitable for everyone. When a person makes an order, the e-mail field can't be made mandatory, because not everyone uses e-mail. But if someone has already voluntarily posted their address, then feel free to send trigger mailings.
• Placing on Marketplace will not give absolutely no promotion to your resource, but can give you direct sales. Suitable for quick results, but in the long term should not bet on it.

Price monitoring is a manual or fully automated analysis of online stores to study the pricing policy set by the sellers on specific items. The main task of this process is to detect dumping (artificial underpricing below the MRC).

5 minutes or 10 hours? Automated and manual monitoring of prices in time

Suppose you found a site that is dumping manually. What to do next? The first thing to do is to take a screenshot of the violation and send it to the supplier describing the situation. On average the procedure of identifying dumping, preparing and sending 1 letter takes about 4 minutes. And now in the numbers in more detail:

• 1 page of products in 1 marketplace and one generated letter = 4 minutes
• If there are 20 such products in 20 different stores? The time spent in this case will increase to 80 minutes!

You have to realize that a range of 20 catalog items is a rarity! And more often we are talking about monitoring 100 or more units of products. Add to this the fact that it is impossible to calculate - the heat of the relationship, emotions, the human factor in terms of possible error. Automated method of price monitoring will solve the problem faster and more effectively!

Monitoring of competitors' prices. The question of the legality of the procedure

There are 2 provisions in the legislation of the CC on this issue:

1. Information about the prices of goods and services is publicly available. Not a single legislative act talks about the prohibition of photo/video recording of price tags in stores or collecting relevant data via the Internet.
2. Anything that prevents the collection of such data is illegal.

The pseudo-arguments that the owners of online stores or physical marketplaces can operate with when objecting to monitoring:

• "The store is private property. Screenshot (for online stores) or photo/video recording (for physical stores) is prohibited". It is against the law to use private property, defacement, etc. You are in no way violating this article by collecting information.
• "Prices are a trade secret." The most important criterion that defines the concept of a trade secret is that it is not easily accessible. It's kept behind seven locks and certainly not on display by online stores.

Automated price monitoring is a completely legal and fast method of obtaining information about how your competitors behave on the market in terms of set prices.

And what segment do you operate in - economy, medium or premium? By comparing your assortment with the positions of your competitors in the course of online monitoring you are able to define for yourself which audience you have to orientate to in the first place, and also to define the competitors with whom it is better not to compete.

Operative monitoring of prices and pricing

The initial setting of adequate price, which takes into account all the details and trends in the market is one of the first commandments of a successful business! It's not just a price tag, it's a whole strategy that can have several directions:

1. Pricing is aimed solely at the customer. The figure is accepted on the basis of the analysis of the fact of how much the consumer is ready to pay for the goods you sell.
2. The price is based primarily on cost. You take the initial cost (purchase) and add the margin offered by the manufacturer to arrive at the final figure.
3. On the basis of market fluctuations. This method involves constant monitoring of the segment, tracking all changes in price, and setting the average for yourself.
4. "From the supplier" - the RRP, exhibited by the manufacturer of the product, is taken.

For each of the options described above, it is mandatory to monitor the prices of competitors. And the more operative it will be, the more accurately it will be possible to build a scheme of work.

After determining the optimal pricing strategy for yourself, it is necessary to choose one of the methods of trade:

 

•     Setting premium prices right away - setting the price tag specifically higher than competitors.
•     Pricing is based on psychological techniques. For example, a price that ends in an odd number is perceived as the most affordable.

Why is responsiveness one of the mandatory parameters of price monitoring?

This fact can be explained by the relevance of the received information. Price lists of competing stores may change every week or several times a day! Therefore, it is important to ensure not only the speed of analysis but also its frequency.

Helecos is an independent and multifunctional program that allows you to monitor several competitors simultaneously, regardless of the richness of your assortment in a fully automatic mode!

Dynamic pricing is price formation based on external market conditions in your segment. It is a value that is only relevant at a given moment and can adapt (either manually or automatically) as new market conditions arise.

With dynamic pricing, the cost of a product/service can undergo adjustments every few minutes! Hence the fiercer competition - "the one who had time, has time to eat.

Modern realities compel to always be aware of the latest trends on the market. Online-trade today confidently prevails over offline-markets in terms of sales volumes and requires another level of analysis.

Affordable tools for online price and assortment monitoring in 2020:

 

• Automating databases - Changing price tags on a website can be done without human intervention! Only initial setting of parameters and conditions is required.
• Monitoring of pricing policies pursued by competitors - also performed in real time and fully automated. The tool signals about all violations of the price policy within a minute!
• Machine learning - courses, trainings, training programs for personnel online, etc.

All this attention to Internet commerce and led to the active development of the concept of dynamic pricing.

Dynamic pricing is a kind of competitive pricing. To be more precise, it is a more advanced version. This type of pricing is suitable for the premium segment and for areas with high-paying services. For example it is actively used in the sectors of air and rail transport, when the cost of the ticket is formed depending on the time of day, week and month. There is demand - the price is higher. Thus there is a natural division between those who can and are willing to pay a higher price for the same service. That's what gets companies to make super profits on the spot.
There are many marketing tricks to which online retailers can resort, thereby winning greater profits. For example, you can set a price that ends in 99 and thus the difference in price will be only one penny, and the psychological customer will see a lower price. Also hidden costs, for example, the price in the store may be set lower, but the delivery is put on the customer's shoulders.
Low or competitive price is not the only factor that influences the purchase in the store. No less important were and still are the rating of the store, positive reviews about it on the Internet, fast feedback from the managers of the store, the availability of free delivery and of course the availability of the product itself in stock on the day of the order.
It doesn't matter if you sell in your personal online store or on prom or outlet or amazon, you will in any case need to analyze competitors' prices. Because setting a dynamic competitive price for any product or service increases your profits many times over.

Why is setting the right price the key to high sales and a thriving business?

Some subject matters on the topic:

1. Prices and sales volume. How these parameters are related to each other and why the price monitoring requires special attention today? - The analysis of modern buyer behavior shows that 86% of all online customers study offers of 5+ sites with the searched product in search of the LOWEST price of the goods! Because of this, constant monitoring of prices in the marketplace should be the #1 task for every seller with an immediate response to changes.
2. What is the essence of dynamic pricing and its history of taking root in the topic of online sales? Initially, this pricing technique was demanded mainly by manufacturers and suppliers seeking to systematically monitor their retailers (for compliance with PSC). Today, however, this technique is already being used by retailers themselves to monitor dumping and make constructive decisions on the adaptive pricing of their goods.
3. "Change or leave" is the main idea of business in sales today. You overlook a competitor's dumping - you lose millions (for a major market player). Allow history to repeat itself systematically - permanent losses and eventual closure! Today it is important to be responsive to all changes in competitors' prices and change your own in a timely manner. Automated monitoring systems are the key to successful online trading, taking into account hundreds of market trading parameters and informing you in time about violations!

What pricing strategies are there

E-commerce pricing has to take many things into consideration. The key question here is: How, in this "race to the bottom" with other sellers, do you not devalue your goods and turn your income into a loss?

There are four pricing strategies. Which one is more effective?

In order to gain a competitive edge, it is important to consider several psychological principles as you set the price of your product/service:

• Branding
• Consumer goals and desires
• Social impact
• Numerical performance

About pricing strategies with these principles in mind:

1. Generating product value based on brand. This method is based on the prominence of the brand you represent. The price tag a customer is willing to pay often depends on brand perception. If you want to sell more expensive than your competitors, show the customer how your product is more valuable than others on the market!
2. A pricing strategy that takes into account the user's desires. When a person is looking for the product he wants, he understands approximately how much he is ready to pay. You, on the other hand, should put a price tag that takes those desires into account. Recommendations:
   • Create a portrait of the customer and constantly update it. It is important to create portraits of ideal customers for different types of customers (with different problems that, in fact, make them buy your product). Take into account the average income of your audience and other data that determines their willingness to pay.
   • Awaken a sense of urgency. A sense of "elusive fish" can also drive sales if product items seem limited.
3. Pricing that takes into account general social pressures. Many people look at the experiences of others who have already bought a particular product and consider their opinions! You will see a significant increase in sales if consumers see evidence of the high quality of your product. Hence we can talk about an increase in its value due to high quality.

4. Due to the subtleties of human psychology, people's willingness to pay is even determined by the arrangement of the numbers in the price! How many digits the price tag contains, what numbers it ends with - factors that make the cost seem more expensive or cheaper to the buyer (depending on the design).

Helecos is an online digital competitor monitoring system that is based on facts and takes into account the price play of all your competitors!

A few minutes analysis of competing online stores will give you a complete report on possible dumping and prices operated by your opponents!

Why Dynamic Pricing is preferable regardless of the field?

1. Revenue optimization. It's about finding the perfect balance between store turnover and direct profits. First of all this graph is about increasing the number of sales, which directly affects the revenue component and the profit in the end. Constructing a machine algorithm, which is the basis of dynamic pricing, will allow you to create such a cost of the product, which will take into account all the criteria of your business policy and price trends in the market!
2. Analysis of prices and offers put forward by competitors. It is a question of identical assortment or analogous products, it is important to keep track of such market players! Choosing the right competitive strategy will allow you to adjust the dynamic pricing competently and will provide a significant advantage in the competition.
3. Make your offer as interesting as possible in any season of the year! There is a seasonal slump in sales with almost any product! However, with the right store policy, you will be able to attract your customer even out of season! A drop in demand does not mean that the customer stops being interested in your product. Optimize your price offer and equalize sales. All of this is possible with dynamic pricing.
4. Focus solely on profit! The stability of your product's pricing policy is, more often than not, shaped by the manufacturer. It is he who sets the recommended price for his products and controls it at this level. At the same time the adjustment of these figures is done at best once a season. This sales model most often pursues a strategy of static prices, and that is either loss of profits (if the price tag is understated) or customers (if the price tag is high)! Dynamic pricing will allow for flexible adjustment to current market conditions and adjust demand by optimizing the price.
5. Growth of sales volume. Price competitiveness is the key factor in this matter! If this point is not provided, the retailer definitely loses sales and subsequently a considerable part of income. Dynamic pricing will allow you to mirror the market demand and adjust the price tags on your products. The result - a constantly high demand for goods/services.
6. Reducing labor costs for manual and inefficient competitive monitoring. In many companies, this task still rests on the shoulders of a live person who "sits" on the bid and does the monotonous job of analyzing competitors daily. Of course, in the matter of changing prices on the site, there is also no room for automation. However, in addition to the large amount of wasted time, there are several other important disadvantages:
   • The work done and the price information obtained quickly lose relevance and need to be reanalyzed.
   • The cost component of the process is unreasonably high (wages to the employee, equipment for the place of work, etc.)
   • Limitation in the amount of work to be done. Automated software allows you to simultaneously analyze dozens of online stores, which is impossible to implement in manual analysis.
7. The return on advertising costs is significantly reduced in time. If the price tags on your products are low-competitive, then every next sale will cost an order of magnitude more for you! With dynamic pricing and automatic systems of price analysis you can maximize your conversion rates and advertising profitability.

How does dynamic pricing work in online sales?

Whether you are shopping in a supermarket, buying a train ticket or looking for services, regardless of the specifics - any area where there is a place for prices is associated with dynamic pricing! The price of tangerines on New Year's Eve and in February will be different in many ways. The point is that with dynamic pricing the cost can change depending on a number of factors and when selling goods online their list can be completely different.

• Parameters that form the price tag of goods when selling online:
• How many competitors are already operating in your segment?
• What is your pricing strategy, how does it differ from other players?
• How much does the product cost you to buy?
• What is the minimum profit we are talking about?
• What are the min and max prices of your nearest competitors?

The main result of the analysis of answers to all these questions is the establishment of the RRP (recommended price). It's a figure at which each individual retailer can get the maximum profit.

The recommended price (RRP) is? Influencing Factors.

Besides the parameters listed above, RRP considers a whole range of other factors including exchange rates, life cycle of the goods, changes in demand, quantity of competitors, and many others.

In this case, each online store can make a decision on an adaptive setting values SSC! Here already takes into account private actual results:

• The change in the revenue component (in the expected perspective).
• The actual change in revenues after the planned time.
• The change in the sales level of the target plan (for the period of the RRP).
• Actual sales over the period of the recommended price.

Based on these points, the RRP for each seller can change depending on the "appetite" and the new pricing strategy chosen! This point forces you to "keep your hand on the pulse" and constantly monitor the key online stores in a particular sales segment. Recipe: Automatic price monitoring!

Why is dynamic pricing a priority today?

1. Maximum availability of the data on hand for dynamic price optimization allows the entrepreneur to significantly increase the conversion rate.
2. Greater efficiency in decision-making. This is due to a high level of awareness of the state of affairs in your segment in the market.
3. Understanding general industry trends becomes clearer. Automatic monitoring will allow you to optimize your price offer immediately in response to competitors' changes - automated dynamic pricing from Helecos.

Known types of dynamic pricing - what is it?

Depending on the objective of the initiator of monitoring, the following variations of pricing are possible:

• Segmented - customers are divided into segments, and for each group a different price offer is prescribed.
• Time-oriented - the use of this method is relevant to those companies that focus their customers' attention on high speed of service, round-the-clock operation, etc.
• Change of market conjuncture. Adapting to market changes - that is the essence of the method. Sales are falling - a strategy of low prices, etc. is chosen.
• Penetration pricing. This type of dynamic pricing is used during business expansion to familiarize potential customers with the offer. Initially, the price tag is set lower than the market price and builds up little by little over time.

A recipe for dynamic pricing that works for you

The most important thing in this formula is maximum price transparency for your customer. It is necessary to lay out what can affect the final cost of the goods.

As for the initial optimal price list, a detailed competitor monitoring with automatic systems like Helecos comes in handy.

Automatic price monitoring system Helecos or similar by its functionality allows you to investigate an unlimited number of competitors for dumping and other violations of the "terms of the game" with automatic change of price lists on your site according to algorithms you set. That's called dynamic pricing - your tool to make your business more profitable! Details: 0730721221.