Pricing Engine And Pricing Decisions

As a retailer, pricing decision is determined by one or more of the following factors: competitors’ pricing, the behaviour of customers, inventory thresholds, sell-through goals, cost-based margins, and seasonality.

What is a Pricing Engine?

A  Pricing Engine Is an ultimate and unique tool for retailers. This software is one that accumulates market data in real time and aids retailers instantly are prices for each shopper based on customer behaviour, purchasing power and actions from competitors.

A pricing engine that does not add all of the above to allow retailers to create the optimal price is most likely damaging sales conversion and margins.

What Influences a Retailers Pricing Decision

A lot of retail pricing solutions operating with limited rule-based scenarios are actually more damaging to your e-commerce business than good ol’ static pricing.  Patterns from huge data sets range from competitors

Putting together a perfect pricing strategy is really not easy, any retailer would tell you that. However, finding the right spot for your products’ prices takes a lot of time, effort, and resources. A lot of retailers choose to do their pricing internally, and some choose to use an automated solution. We would explain why a pricing engine is ultimately beneficial for your business.

Additionally, you can do competitor price monitoring. It will help you to find out which new products were published, price repositioning, stock level, crashed promotion, etc.

They Attract More Customers Than Just Lowering Prices

A lot of retailers believe that the sole purpose of a pricing engine is to decrease prices to attract customers to their store. Since some are the only resellers of certain items, they don’t see the point of having a pricing engine to provide them with competitive insights. Why decrease the price of an item that doesn’t bring intense competition? Well, the cool thing about pricing engines is that they do so much more than that.

An intelligent pricing engine will know and understand when you’re the only seller of certain items in your assortment, so it can increase the price of the product to take advantage of the opportunity and maximize margins. It can also help you match the prices of “similar products,” which are products that could be used as a substitute for your unique item. This way all of your bases are covered and you stay ahead of your competitors and remain competitive no matter what the circumstances are.

Pricing Can Bring Value to All Parts of Your Business

For you to be successful as a retailer, you need to ensure that your pricing is right. Price is always the major factor when it comes to customers purchasing decision. It is your job as a retailer to make sure your prices aren’t out of line as a customer might not visit again if your prices are high. Pricing reinforces different parts of your business, and being able to use it as a point of differentiation can give you a major competitive advantage.

What this means is that you can actually use your prices to explain your marketing expenditure and you are able to tell customers and advertise that you have the lowest price in the market. With any competitive monitoring software. It can also strengthen your marketing efforts, and help boost your profits while staying competitive.

Reduced Price

Having a better understanding of your competitors can help you grasp what it’s going to take for you as a seller to compete with them. You don’t need to reduce your practices to pricing with a pricing engine. Various ones also give you information on a competitive array of levels to help you perform a gap analysis between you and your competitors.

You Can’t Get It Wrong When It Comes To Pricing.

A lot of automated pricing solutions are often similar to price wars. Various competitors usually drop their prices drastically low because they think that retailers with automated repricers will follow the plunge and destroy their margins. However, that doesn’t have to be the case. With prices guards involved, your lowest price can prevent a desperate hit to your margins.

What Pricing Engine Is Ideal For A Retailer

As a retailer staying on top of your game should be your priority, we have been able to come up with a suitable pricing engine that is efficient for you.

360 pricing

Created from a need to streamline pricing strategies across vast e-commerce price lists in real-time, 360°Pricing™  plugs in holistic insights from key drivers like price elasticity, purchase history, inventory levels, and seasonality. Users can switch between strategies that take into account the pricing movements of multiple competitors as well as their internal data with modes such as liquidation and sales velocity. This allows retailers to formulate a truly optimal, ‘360°’pricing ™ is likely to increase sales conversion and margins.

Clients already using 360°Pricing™ for six months have seen the following advantages:

• 10 to 15 times Return on Investment
• An 8 to 20% increase in profit
• Margin gains by 10-50%

Conclusion

As a retailer, it is high time for your retail business to open up to new ways of pricing methods and state of the art pricing engines to liberate your business from all forms of shortage like lowering prices to stay ‘competitive’. The lowest price is not always the best price, and intelligent algorithms are here to save the industry from getting sucked up by a deadly black hole of constant mark-downs.