In the evolving retail landscape, success often hinges on a singular focal point: pricing. A recent Statista survey revealed that 70% of US online users prioritize competitive pricing in their digital shopping choices. In this cutthroat arena, where surpassing rivals is paramount, a deep comprehension of pricing nuances is no longer just an edge, but a necessity.
Retailers are increasingly adopting pricing intelligence solutions that meticulously dissect competitor pricing data in comparison to their own, down to the SKU level. This analysis empowers their pricing teams with the insights they need to price their products competitively on a day-to-day basis.
However, in a landscape where a staggering 50 million price changes occur daily, reliance on a reactive pricing intelligence solution, though effective in many ways, often falls short. To develop a strategic and predictive pricing engine, retailers also need the ability to track historical pricing relative to market conditions, competitor actions, seasonality, promptness of competitor pricing actions, and more. This would be particularly useful for senior retail pricing and business unit leaders as they look to gain a strategic perspective on their competitive pricing health. However, even today’s leading providers of retail pricing intelligence solutions lack in this area. This results in a relatively myopic view of competitive pricing even in large retail organizations.
DataWeave’s PricingPulse helps retail leaders better understand their competitive pricing strategies in comparison to relevant market dynamics over time. The capability bridges the gap between day-to-day competitive pricing operations and long-term strategic pricing analysis and actions, enabling senior retail pricing leaders to untangle the complexities of their pricing strategies. Delivered as a dashboard, the view offers an elevated vantage point for industry-wide pricing dynamics, empowering retailers with the foresight needed to navigate market shifts, predict vulnerabilities, and capitalize on new opportunities.
PricingPulse is provided to all DataWeave retail customers as an add-on to our Pricing Intelligence solution.
The insights offered by PricingPulse enable retailers to answer pivotal questions about competitor pricing behaviors, price leadership across categories, timing of price changes, and the effectiveness of capitalizing on price improvement opportunities. Some of the questions that PricingPulse offers answers to include:
In the following section, we share a few views available to retail leaders via our PricingPulse dashboard. For a complete list of insights available on the dashboard, request a demo today.
This view provides retailers with an overview of the price leaders across various product categories and how it changes with time. More often than not, retailers would aim to gain price leadership in certain categories, while maintaining healthy margins in others.
Retailers can also gauge their consistency and effectiveness in maintaining a competitive edge for key categories over time. They can fortify areas of strength and identify opportunity areas to optimize their pricing.
In addition, the dashboard tracks a retailer’s price index across categories, a measure that determines its price competitiveness.
The price index is determined by dividing the retailer’s price by the lowest price offered by any of its competitors. A ratio lesser than 1 indicates that the retailer is the lowest priced in the market. This measure is also presented for competitors, providing insights into competitors that are most attractively priced in the market. A timeline trend of this metric helps track how price leadership among retailers changes over time.
This view provides a summary of the level of price changes by a retailer and its competitors over a period of time, which includes the average magnitude of price changes as well as the proportion of the retailer’s assortment that underwent these price changes.
In addition, the number of price changes each month are provided for each retailer. This is further broken down into the total number of price changes during each day of the week.
These insights help retailers determine which competitors are most and least active in their pricing activities, how aggressive the pricing actions are, and if there are any specific price change patterns followed in terms of the days of the week or month.
The dashboard actively reports on price improvement opportunities, which could include either a price increase opportunity or a price decrease opportunity, for a retailer and its competitors across categories over time. A price increase opportunity occurs when a product is significantly under priced (by more than 2%) and a price decrease opportunity occurs when a product is significantly overpriced (by more than 2%).
Further, the retailer gains insight into how many price improvement opportunities were actually acted on within 15 days of the opportunity presenting itself. This “action rate” helps retailers quantify how well they seize on price improvement opportunities, which eventually result in higher sales and margins. The dashboard also reports on the average number of days it took for a retailer to act on a price improvement opportunity, thereby quantifying the responsiveness and agility of pricing teams.
This is especially useful for pricing leaders to “audit” or evaluate the performance of their pricing teams. When similar insights are viewed for a set of competitors as well, retailers can better understand the level of sophistication of their competitors’ pricing operations.
The launch of DataWeave’s PricingPulse marks a significant advancement in the realm of pricing solutions for retail leaders. As the retail landscape undergoes continuous transformation, the significance of precise pricing strategies cannot be overstated. PricingPulse is the first and only pricing view in the industry to bridge the gap between tactical pricing decisions and comprehensive strategic analysis.
In a world where agility and foresight are crucial, PricingPulse equips retail leaders with the ability to predict competitor actions, optimize pricing strategies, and stay ahead of the competition.
If you are a senior pricing leader or retail business unit head, reach out to us today to either sign up or learn more!
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