It’s another busy morning in your office.
Your team gathers around a table, armed with spreadsheets and market reports. You all agree that you want to set better prices that attract new customers and keep profits safe in the tough online retail world.
But doing it manually just isn’t enough.
You need a better way - a strategy that can adjust prices quickly to beat the competition.
In this article, we’ll show you 8 ways you can create a more efficient pricing process.
Discover how automation, dynamic pricing strategies and data-driven decisions can help your e-commerce business achieve sustainable growth.
Table of contents:
- 8 ways Nordic e-commerce companies can create a more efficient pricing process
- The power of an effective pricing strategy
8 ways Nordic e-commerce companies can create a more efficient pricing process
From automating pricing updates to understanding who your customers are - here’s eight ways you can create a more efficient pricing process from beginning to end.
1. Automate pricing updates
One of the biggest ways to create a more efficient pricing process is by leveraging automation.
Using automation is on the rise among businesses, with more than half of businesses adopting it to boost efficiency:
Plus, a whopping 75% of companies leveraging workflow automation claim that it provides them with a powerful competitive advantage.
So how do you get started?
An easy solution is to use pricing optimization tools to adjust prices in real-time based on market trends, demand, and competitor pricing. That way you make sure your prices are always competitive and up-to-date without having to manually intervene.
Let’s say you’re an outdoor clothing e-commerce company who wants to stay ahead in your competitive market.
Enter Reprice, a pricing optimization tool that helps you automate your pricing updates.
With Reprice, you can automate price adjustments based on real-time competitor rates, seasonal demand, and inventory levels.
And when competitors offer a product at a lower price, Reprice instantly matches or beats it by a set percentage. At the same time, when inventory levels drop below a certain margin, Reprice can quickly increase your prices to capitalize on scarcity.
The tool lets you set rules like "price products 5% below the lowest competitor" or "raise prices by 10% when inventory goes below 50 units."
The result? A kind of flexibility that ensures you stay competitive.
2. Implement a dynamic pricing strategy
Another way to improve your pricing process is by implementing dynamic pricing.
In short, dynamic pricing allows you to rapidly adjust your prices in response to changing customer demand. Which in return allows product managers to stay competitive in the fast-paced market with multiple price adjustments made daily, weekly, or monthly.
This kind of flexibility is showcased in the online retail industry, where factors like product availability, popularity, and specific market trends can really affect customer decisions.
You can increase your profits by using dynamic pricing models that consider these factors to set the best prices:
- Customer behavior
- Time of day
- Inventory levels
Reprice is a great tool for businesses aiming to adjust their prices dynamically. It allows both manual and automatic price changes according to rules you create.
For example, you can set rules based on factors like "brand," "category," or "tag" for specific products. Additionally, you can choose criteria such as "keep up with competitor X," "maintain a certain minimum profit," or "adjust prices slightly up or down" to personalize your pricing strategies.
3. Understand your customers
Our third tip to create a more efficient pricing process is to analyze customer data. From there, segment your customers based on their buying habits, preferences and price sensitivity.
That’s how you can truly understand your customers and their different needs.
Segmentation is key, and can make a huge difference for your company.
Because it makes you 130% more likely to understand what motivates your customers and 60% more likely to grasp their concerns and challenges.
Increased lead generation and revenue, as you’re better equipped to cater to your customers' needs - and drive overall growth.
After understanding their customer base, a company can use Reprice's dashboard feature to gain a complete overview of product and sales performance. Meaning they get a “birds eye view” to easily track how their products are performing in terms of sales and revenue.
By having all this data in one integrated dashboard (without having to log into several tools to get the sales and revenue reports they need), they can quickly analyze the impact of their pricing strategies on different customer segments.
Which as a result, helps them tailor their pricing strategy further with real-life, data-driven insights.
4. Monitor your competitor’s pricing
A great way to stay ahead of the game is by monitoring your competitors' pricing.
Leveraging pricing optimization tools helps you gather valuable data on your rival’s pricing and makes it easy to adjust your own pricing strategy. Which helps you increase your own competitive advantage.
With Reprice, you gain access to real-time competitor data, which allows you to stay informed about your rivals' pricing strategies, and from there, make quick adjustments to your own prices.
This seamlessly integrates to your ERP or external data source (like Big Query) to provide up-to-the-minute competitor pricing information. No more dreadful Excel sheets and slow in-house tools to monitor your rivals.
And once you’re armed with this kind of data, you can optimize both your pricing tactics and strategies for even more success.
5. Optimize discounting
If you really want to make your pricing process more efficient - try evaluating your discounts and promotions.
Consider the following: Instead of implementing blanket promotions that could damage your profit margins, go for target discounts instead.
One tool that can be helpful in this process is pricing optimization software.
With Reprice, you can easily set your own discounts for each brand, category or product. In other words, giving you the freedom to customize your discounts based on seasons, ongoing promotions or product demand.
Because here’s the thing: By tailoring discounts this way, you’re more likely to attract customers while keeping your profits safe.
And, by manually adjusting discounts, it’s never been easier to respond to those quick market changes or whatever your competitor is doing. Or what your customers want.
If your biggest rival is suddenly giving out great promotions, you can respond by changing your discounts to provide something of the same (but better) deal.
6. Leverage analytics and data
One of the main ways to make your pricing process more efficient is by reaping the benefits of analytics and data. That way you get the information you need to identify pricing patterns and opportunities, predict demand, and ultimately: Set the best prices.
Enter tools like Reprice, which analyze past sales data and market trends to suggest the right pricing adjustments in order to meet demand.
One of the main features is its personalized pricing recommendations aligned with your pricing guidelines.
Before these suggestions are implemented on the website, they must be reviewed and either accepted or rejected.
With Reprice, you gain the ability to swiftly act on products with the most favorable profit margins or products that enjoy strong market demand and are fully available in stock.
This empowers you to optimize your pricing strategy and effectively cater to customer needs
Ensuring your business stays competitive and successful.
7. Conduct A/B testing
Consider conducting A/B tests on different strategies. It's a common practice nowadays, with 83% of companies worldwide adopting it.
How does Reprice help?
By allowing you to create two pricing rules for the same product category. By measuring the performance of each approach, you can much more easily choose the most effective one.
AKA, making the best data-driven decisions for pricing changes.
Let’s say you’re a retail company specializing in electronics. You could use Reprice to test two different pricing strategies for a special new phone model.
One of the strategies could include using a slightly lower price to attract those budget-savvy customers. The other strategy would be to maintain a higher price, where the main goal is to emphasize premium features.
Once you’ve conducted your tests and evaluated your results, you can with confidence choose the approach that boosts profitability. Which ultimately enhances your overall pricing strategy for smartphones.
8. Be transparent with your pricing
Lastly, if you want to enhance your pricing efficiency, it's essential to increase the transparency of your pricing.
That way you ensure clear communication with your customers about all costs, including those additional fees.
Transparency is gold, and worth spending more time on. The reason being that it fosters customer trust - and 39% of consumers have switched to a competitor because of undisclosed costs alone.
But manually adjusting your prices to be seen by all customers is time-consuming and prone to errors.
Reprice offers a streamlined solution, which gives you a much easier way to updates your prices in bulk. It ensures transparency by automating price adjustments based on recommended retail prices from suppliers for brands, categories, and tags.
Additionally, it integrates with electronic price tags in physical stores, maintaining consistent online and offline pricing. Automating this process promotes accuracy and transparency, providing customers reliable pricing information.
The power of an effective pricing strategy
Putting in the effort to make your pricing process more efficient can be a game-changer.
Here are a few of the advantages:
- Competitive differentiation: By looking at factors like market demand, product positioning and what your competition is offering, you can strategically set prices to create that unique identity for your brand.
- You showcase your value: Establishing the right balance between perceived quality and pricing makes sure that your customers appreciate the true worth of your product.
- Gain more customers: Price is often the make-it-or-break-it factor for customers. With a good pricing strategy, you can pull in potential new customers, making you a desired brand.
- Boost revenue: By taking into account customer preferences and behavior, operational costs and market conditions - you can much more easily set prices that actually drive success and maximize your income.
- Your customers become more loyal: Fair and justified prices enable more trust and reliability amongst your current (and potential) customers. Which ultimately leads to stronger, more long-lasting customer relationships.
Having an efficient pricing process is key if you want to grow your business and get ahead of the competition.
In this article, we outlined 8 ways you can easily boost the efficiency of your pricing process:
- Automating pricing updates
- Implementing a dynamic pricing strategy
- Understanding your customers
- Monitoring your competitors
- Optimize discounting
- Leveraging analytics and data
- Conducting A/B testing
- Being transparent with your pricing
All of which is done easily with the help of a pricing optimization tool like Reprice.
Ready to start seeing real results?
All while maximizing the value of each customer transaction?
Book a demo with us here.
Robin Frugaard Jørgensen
Chief Commercial Officer at Reprice
Robin Frugaard Jørgensen is Chief Commercial Officer at Reprice. Prior to joining Reprice in January 2023, Robin spent several years working with pricing strategies in B2B & the consumer electronics industry. Connect with Robin on LinkedIn here or book a demo to see how Reprice can solve your e-commerce pricing challenges.