How price tracking can help you compete with Amazon
Unless you’ve been living under a rock, you would be aware that online behemoth Amazon is finally coming to Australia and it’s left a lot of retailers scared. The latest move from the online giant has been its acquisition of Wholefoods in the US.
“This move raises a serious red flag for all retailers down the road – once Amazon wins the high frequency purchase, they are likely to win other purchases – from blenders to lamps to shirts – due to convenience buying,” explained senior analyst at Forrester, Brendan Witcher. “The market should take note that this is just the beginning for Amazon – it’s the first inning of a game that has a long way to go.”
Indeed, Amazon forces businesses to rethink their business models, added Credit Suisse analyst Grant Saligari.
“The lesson for Australian retailers is to be prepared with a defendable range, sustainable cost structure and sustainable allocation of capital,” he said.
Meanwhile, a customer survey conducted by Nielsen in February revealed that customers are looking forward to Amazon’s entry in Australia, with 56 per cent of respondents saying they would be likely to purchase from the site. After all, it’s well-known that many customers prefer to shop at the website due to its competitive prices.
While it’s true that you can’t out-Amazon Amazon, it’s imperative to stay on top of your competitors’ prices to help retain your business’ margin and work out which product areas are worth investing in the future. You may not want to necessarily match the prices of other retailers every time, but it’s prudent to understand where the market’s going and what the current trends are.
However, for a lot of businesses, price tracking is a long, painful process of simply hopping online, randomly visiting a few websites and checking out who’s selling what.
“We just glanced at things every few days and noticed we’d stopped selling a particular product and wonder what was going on. We figured someone must have been be beating us in price and so we’d go online, do a search and just look at whatever came up,” said the Marketing and Ecommerce Manager of an electronics online retailer.
“It was archaic and unstructured and there was no set rules around doing it. We only tracked prices when we noticed something.”
For retailers that have thousands of SKUs, it’s impossible to manually keep on top of all your competitors’ products and it could be months before you realise that one of them has changed their price on any given product.
But with a price tracking tool like SpotLite, businesses are given a snapshot of how their own prices compare to other retailers and are also able to drill down into specific product categories for more comprehensive information.
“As soon as we implemented SpotLite, we saw a five per cent increase immediately in revenue, which is quite substantial. We’ve been using it for six weeks now,” said the electronics retailer.
“We saw all these new products that we’d never sold before because we weren’t focused on them. A competitor may have been selling products that we hadn’t sold because we were too overpriced. They might have had 20 to 30 per cent discount on it, and as soon as we implemented SpotLite, we’ve been able to track those smaller items.”
“At the end of the day, it’s made a huge difference to the bottom line.”
SpotLite will help sharpen your business before Amazon hits our shores. It’s time to lift your business’ game.
As Paul Greenberg from National Online Retailers Association says, “Amazon will be good for Australian shoppers. Those who are fearful are either unprepared or defaulting to old bad habits of control.”
Here are four ways that SpotLite can benefit your business:
Focus on new categories
Many businesses that track prices on their own tend to only view their most expensive products, but with SpotLite, retailers can view prices for products in smaller categories which they can focus on, thus having a big impact on their bottom line.
Help retain margins
SpotLite also gives businesses the opportunity to find out which products they have priced too low, as well as those that are too high compared to their competitors.
Increase in productivity
Less time is now spent simply cruising the internet and more time can be invested in other parts of the business.
Real-time price alerts
You’ll be sent notifications when a competitor changes its prices on products, so you can make pricing decisions immediately if necessary.
SpotLite is the most cost effective solution in the market today so retailers and brands of all industries and sizes can make the most of real-time pricing intelligence. To get 50 per cent off in the first two months after SpotLite’s 30-day free trial, visit www.spotlite.com.au and enter ‘IR50’ in the coupon code field.