Buyers are constantly vetting their options – making sure they are getting the best price, at the best time, on the best products. This makes it important for distributors not only to know what their competitors are carrying, but also what they are charging, even if it is a list price.
With the advent of eCommerce, frequency of price changes has also increased. In this dynamic retail environment, gleaning competitor pricing insights manually is proving to be insufficient. It is time consuming, error prone and inaccurate.
Some distributors are adopting advanced technology and automation to gather relevant pricing insights. They are implementing the following steps:
- Identifying key value items (KVIs). Gathering competitor pricing insights for a distributor’s full assortment is daunting. Many distributors are choosing to gather insights for only KVIs as the return on investment (ROI) will be higher.
- Accurately matching items. Identifying similar products to the distributor’s KVIs in a competitor’s assortment is key to accurate price comparisons. Similarities include characteristics like product descriptions, color and size and other factors. The more data extracted, the closer the matches.
- Normalizing units of measure. To achieve the highest level of accuracy, units of measure of the matched products are then converted either to standard or metric systems.
- Factoring store or region-specific data. Distributors leveraging regional and seasonal pricing data have an added advantage and can build well-informed, competitive pricing strategies.
Not only can the distributor now track exponentially more KVIs than possible when using manual processes, it can also feed the resulting data directly into its ERP system. Decision makers can see in a glance how their prices compare to the competition, as well as how many overlapping products they share with them. With this level of competitive intelligence, they are now able to set their prices more competitively and continue to be the first choice for their customers.
Some of the content in this article originally appeared in Industrial Distribution on September 12, 2018.