In today’s world customers are not attracted with the cheapest prices, they are attracted towards the right prices. Where they can have a value for money product activity which is not too low but neither too high. For that a business to be successful they should set their prices strategically and set them on time.
But among all the cluttered activities of business, how will you find out which is the right time for what price and when will you analyse it when the market dynamics are changing every moment these days.
So, how can you find a balance between analysing the market and changing the prices according to the analysis, while it is effective?
Dynamic Repricing can act as a boon for you if you are facing similar problems.
Let’s start from the start, so first we will discuss about what is dynamic repricing before implementing it.
Dynamic Repricing is the process of altering your products’ prices on the basis of the dynamics of the market to attract more sales and maximize your profit margin.
In other words, we can say that in dynamic repricing, the product’s prices are modified when competitors’ prices change, or your stock status is changing, or its just the demand of your customers, this alteration of price is important to survive in this cut throat competition as well as attract new customers.
The main factors due to which a change in price happens are competitors’ prices, market demand, and inventory level. Time of day, seasonality, and customer behaviour. If the prices are set while keeping these factors in mind, those prices can be said to be optimal prices. Optimal prices are very important in today’s era to maintain the profit margin and growth of the business.
Every era in the marketing comes with different sets of solutions and problems and now when our market is shifting towards digitalization, where people prefers listing of product on a screen more than wandering around the market physically, but with these opportunity of boundaryless growth there are also some new problems every business is dealing with, lets discuss these problems.
Before understanding the about the problem, let’s get a basic knowledge about what is buy box is. Well, buy box is the side corner box displayed on every ecommerce website for best deals to initiate sales for the respective retailers or dealers. It can drastically increase the conversion rate of the sale for retailers who win the buy box.
So now you know that the buy box has become one of the most important thing when it comes to retaining or increasing sales and attract new audience, but it can be difficult to have a buy box with the constantly changing algorithms of the ecommerce websites as well the changes in the prices according to the time.
In today’s era when there are countless retailers who are selling the same product as yours in the same platform, it becomes a lucky graze to convert a lead to sale. Because of which business tries to make the offers more enticing and attractive which if done aggressively can cut down their profit margin due to the intense competition.
Business these days are unaware of the ways to attract customers without lowering the prices, while they have to compromise with their margin if they do.
While ecommerce market facilitates shopping for the customers, it intensified competition to another level, where businesses are knee bend to not missing even a single customers to their competitors for that they adopt many strategies like dynamic repricing, etc which forces other businesses to adopt it even when they don’t want to. And still the threat of missing sales and profit margin is not settled because of constantly changing technologies and strategies in the market.
Ever filled your inventory on the predication of experts or due to the upcoming season, but what should be your peak time for sale is the one where trends shifts, making all your investment worthless and having pile-up inventory in your warehouse, for which they business offers unbelievable offers to clear the piled-up inventory which can reduce your brand value in the market too.
These days there are business who changes the prices of their product multiple times a day according to its demand and requirement which can be hard to compete, especially for small businesses which can be the reasons for their lower conversion rates and expansion. Staying competitive and up-to-date in the market became a task in itself which many business fails to complete.
“No one creates a lock without a key.”
Similarly, if there is a problem there will be solution too, maybe its not what you wanted to do or your comfortable with that solution but still it can’t change the fact that it is a solution. So even digitalization comes with lots of problems there is dynamic repricing which can solve all of them. And even when its sounds new, dynamic pricing is the strategy which had been used form decades by travelers and hotels which now you should apply to your business too.
Below we discussed how dynamic repricing is solving the current problems of market.
In the market place, pricing in one of the most important factor, either it is to win new customers or buy box from the websites. But with constant alteration of prices these day, it is next to impossible to set right prices at right time manually. But Dynamic Repricing can take this heavy work from your shoulders as it understands your competitors alteration and changes your products pricing automatically.
Check out to know more about Dynamic Pricing
If you want to make sure that your conversion rates should be stables around the years and you can convert new customers as well as retain old one then you need to be the first one to understand the trend shift and adapt to it. For example if your customers are not buying your best-seller anymore, you can either persuade them with different tactics or you can launch a product which will be according to your customer needs, the solution is adapting according to the market demand while first one is standing rigidly for it.
Dynamic pricing can make you adaptation to changes in pricing effortless, which can give you first movers advantage.
Profit is the soul of any business, every business works for profit and no business can survive without optimum profit, but understanding what is the right time to maximize your profit can be a difficult job, but not with dynamic repricing. Dynamic Repricing is backed buy AI based algorithms to make predict the future market conditions and set your prices accordingly.
While it is harmful for your brand value to offer obvious discounts for long run, dynamic pricing can still clear your piled-up stock by setting a bit more competitive but attractive offers to charm them for purchase which can eventually clears your inventory without harming your brand value.
Staying competitive is not just about knowing what your competitors are doing but taking actions at right time, which can be difficult manually, but you can still be competitive by dynamic repricing which automates the repricing of your products according to the market situations and need.
While Dynamic Repricing sounds an amazing and powerful tool its really not for everyone. Just like an awesome medication is not for everyone but only for the diseased, technologies acts same.
So now we will discuss the situation when you should use dynamic repricing to get best results and grow your business.
If you are selling your products in any of ecommerce giants, it is important for you to keep your product prices more competitive and up-to-date every time as its not just important for the conversion of sales but also for leading in their listing algorithms as all the ecommerce websites tries to provide best and most optimized deals to their customers, so if you might have to change your products prices multiple times in the day, according to the type of goods you are dealing with.
If you are dealing with Amazon, Walmart, etc, then dynamic repricing is must for you.
If you are dealing with perishable good or in fashion industry or in any of the industry where price alteration is frequent and normal, and you need to make frequent changes in your product prices to stay competitive in the market, then dyanmic repricing can work as a saving grace for you as it can lift a very big burden from your shoulders of constantly changing prices.
If you are dealing with large variety of goods in very different streams then it could be very difficult for you to analyze market for each product and change your product prices accordingly. So if you are struggling with these situations or wanting to do expand your business products then it is recommended to use dynamic repricing for better result and growth.
If you are dealing with season whose demand changes from time to time in the year or in other words, if your business products are seasonal then dynamic repricing is must have tool, as during/ the time of season managing the fluctuating prices and making the best offers to tempt more customers are be very difficult for you, and you may lose the sales you can have if you must have decentralized your responsibility.
One of the main reason for every business is fall or rise is profit, if you are serving the best product possible in your industry but you are not making much profit from it, then you chances of surviving in the market in long run will be very slim, as a slightest market shift can affect your tragically. So you can use dynamic repricing if you wanted to make most margin in trend shift or during peak season, and dominate your market with your optimized prices.
If you are facing with any of these situations or circumstances then dynamic repricing will can prove very useful for you. So analyze your situations and your goals before making any decision regarding what you which tools you should use and which you should avoid to get better result with right and optimized expenses.
So after understanding what is dynamic repricing, its use cases and how can it help you in the current market condition we can conclude that dynamic repricing is a very important and powerful tool if you can use it in right way in right situation and use case. But as everything has two side, it is also important to understand that will dynamic repricing will provide you optimized results or there is some other tool you might required for your desired result, so before choosing dynamic repricing makes sure you are prepared for its losses it can cause.
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