Have you ever compared prices before making a purchase decision? If yes, why do you think your customers aren't doing the same?
Price comparison is a very old process, but now it is used on a large scale, larger than you can imagine. Every customer wants the best deal. Some compare it personally, while others use a tool to do it. But in today's market, everyone compares before making a decision.
But if you are running a business, you are not just fighting with few competitors in the market like older times but all the retailers, manufacturers, brands, D2B and e-commerce across the globe is your competitors which is not possible to practically to compare all the competitors for thousands of product daily and sometimes hourly.
But as the competition increases, also increases the need for a price comparison tool in the market also increases because of all the limitations of manual price comparison.
But if you are sceptical about using a price comparison tool and want to explore whether it is the right tool for you, then you have landed on the right article. Here, we will discuss everything you should know about price comparison tools.
What is Price Comparison?
I do assume you know what price comparison is, but let's discuss what it is. Price comparison is the process of comparing the prices of competitors similar to your product to see the competitiveness of your prices. It also helps in the optimisation of product prices.
In simple words, in price comparison, businesses check the prices of their competitors and compare competitors' prices with their prices of similar or same products to make sure their product prices are neither underpaid nor overpaid.
Price comparison also makes businesses understand where they are standing in the market, as if their prices are very low in compare to their competitors and they are able to make revenue then it is not a very god sign than when their prices are nearly or equal to their competitors and they are getting a stable sales, as this represents business's brand value.
Why Price Comparison Matters
In this highly pushing market where everyone wants to gain attention for customers and increase brand value, prices play a very important role in motivating a customer to make a purchase decision. A difference of a few bucks can be the reason for a business gaining a new customer or losing an old one.
So, businesses should give more importance to price comparison than customers give. Below are some important use cases of price comparison and why it matters.
Gives Competitive Edge
Price comparison is used not only for comparing prices but also for analysing customer behaviour, observing the pricing strategy pattern of competitors, and it can even define the marketplace of a business. All the provided information is not only used for data analysis and making effective pricing strategies and business decisions, it makes sure that you are competing in the market or not.
Value Positioning
Before you can find out how price comparison helps in improving value positioning, first, understand what value positioning actually is.
Value positioning is a way of communicating about the advantage and benefit of your product in such a strategic way that you can create a perception of high value and need in the mind of a consumer.
Price comparison helps you to set the price according to the market, as well as it helps you reflect your unique pricing proposition, which can justify the price difference, which is mainly higher than your competitors.
Increases Profit Margin
Price comparison can help a lot in optimising profit margin as you can compare your prices of the same or similar products in the marketplace around different geographical areas, so if you are not able to sell a product in more profit in any area, you can sell it in another area.
This comparison of the same product selling in different areas, online or offline, can be one of the greatest perks of price comparison if applied correctly; in this way, businesses can, not only lead in their area or ecommerce but worldwide.
Customer Loyalty
Price comparison is one of the most important factors by which businesses can create customer loyalty. As customers can see that you are pricing is fair and competitive, which makes them feel safe while purchasing and can rely on your transparent pricing policy,
Evolution of Price Comparison: Traditional Vs Modern
Price comparison isn't a recent technique, it has been used for decades, if not centuries. Where there is a market there is price comparison.
During ancient times, businesses sold goods only in their area, and there was not much existence of companies. During that time, there wasn't much competition because of area restrictions and lack of transportation facilities. During that time, the shops selling similar products were the only competition, which made the price comparison easy and transparent.
But as the industrial era approaches around the world, a number of businesses increases as well as the competition in each field of business, regardless if it a textile industry or car manufacturing industry, everyone has a larger competitor who is dealing goods across the border and ocean, where price comparison becomes a bit difficult. So, businesses came up with the solution of keeping or employing people who can track prices and compare them in their market to ensure the prices are right and competitive.
And now, when we are stepping into the digitalisation era, where there is no restriction of borders and businesses are competing around the world with countless competitors. And now hiring people to extract data to have a proper comparison is an irrelevant way of doing it. With the large number of competitors, comparing data and then analyzing it is not an easy task. It will require a lot of time and effort, and still the accuracy will be questionable.
This turned out to be a tricky problem for business. Tough problems have tricky solutions, and so does this solution, too.
When everything is digitalized market, products and competition, when everything is on the internet and a tap away from you, then why not the tool for businesses and analysis. And then their war raise of business tools like Dynamic Repricing, Price Monitoring, Price Optimization, Price Comparison tool, etc.
So how you know how price comparison technique becomes a price comparison tool and now business can compare prices from competitors around the world. Price comparison tool is proved to be a game changer for businesses in the market place, as it not only erases any kind of physical limitation and also is automated, which means their is no need for human intervention or manual guidance during any process like extraction of data, cleaning and analysis of data or proceeding it to visual representation like dashboards, everything is handled by machines with utmost accuracy.
Types of Price Comparison
Internal Price Comparison
In this type of price comparison business, companies compare the prices of similar products. Internal price comparison is done to understand the price gaps between similar products, maintain consistency, and ensure that no one product eats up sales of all the other products in the organization.
Competitive Price Comparison
This is one of the most commonly used price comparisons in the business field. In this type of price comparison businesses tracks the prices of their competitors who are either dealing with same products or are the leading brands in the market to make sure that the business are providing competitive pricing and up-to-date in a market.
Marketplace Price Comparison
In this type of price comparison business wander around the marketplaces like eBay, Amazon, Walmart, etc. This type of price comparison is very useful to understand the mass behavior of the customers or about trends and price shifts of the market.
Geographical Price Comparison
This type of price comparison is done by the large business who are spread around the world-wide and dealing with different kind if product as different region have different prices and competition about what business needs to have proper knowledge and be up-to-date about it.
How Technology Modified Price Comparison
Tech is a constant changing industry and tech changes everything around it also get affected. Either they are processes or tools everything needs to change and adapt the latest technology to be competitive in the market.
Let's discuss how the changing technology affected price comparison and what are modification it went through.
AI and Machine Learning
AI and Machine Learning industry covers almost 30% of market and affects tool for the accurate and reliable data. Almost 48% of industry of tools and process industry uses machine learning for better predictions and reliable suggestions.
Other than just extraction of data and its accuracy there are many other advantages of using AI/ML, some of them are below.
1. Forecast Price Trends:- AI/ML does helps a lot in understanding the price trends of your industry as it is one of the most important contribution of AI/ML in the industry of tools and techniques. With reliable price trend forecasting business can be prepared for price changes with proper strategy and planning so they don't miss a chance of growth because of unexpected occurrence of events.
2. Observing Pattern in Competitor Behavior** :- With AI/ML you can extract data and let the ML understands the pattern of your competitor's behavior and strategy so you never make a wrong prediction about your competitor next move, so they can never out think and out smart you.
3. Price Recommendation :- Brands that are leading today aren't pricing their products but they are pricing their product right and most optimized. But how does anybody makes such a right decision about prices when there are countless factors included? Well, what is U tell you that they aren't deciding the right prices but their tools which used AI based algorithm to understand market and recommend correct prices on the bases of demand, price, season, competitor and so many other factors.
Web Scraping & Automation
Web Scraping and automated data extraction is one of the most used technique for data collection as these techniques not only collects very large amount of data which sometimes many times larger than what a team of 5-10 people can do while retaining accuracy and quality of data.
There are some major perks for using web scraping and automation tools like, let's discuss some of them.
1. Automated Data Collection:- In todays world you aren't competing from few companies around you but thousands of them around the globe and keeping eyes on each one of them can be wholesome is a task in itself. But web scraping provides you relief from these kind of work which are repetitive and can be automated so you can focus more on the work which requires more of your attention.
2. Reduces Human Error :- With automation and collection of large data, web scraping also retains it's quality so you know that the data you analyzed is reliable and accurate. On the other hand when collection of data and price comparison manual no matter how carefully data was collected, it's quality is always questionable due to human error which are somehow it is inevitable.
3. Speeds Up Decision-Making :- When you are sure about the accuracy of data and all the data is just a tap away then it makes the decision-making process smooth and hurdle-less.
# Challenges In Price Comparison and their Solution
Like everything is there are some advantages, there are some disadvantages of everything is. In this part we will talk about challenges you might be facing while using price might be facing while using price comparison and let's find their solution too.
Data Inconsistency
Data is soul of price comparison, if anything happened to data then it will affect a lot on the quality price comparison. But there are many tools in the market whose quality of data is very questionable and due to data inconsistency business will not be able to use the price comparison tool to the fullest.
Solution
The most effective solution of this problem is to choose an reliable price comparison tool. Like Price Comparison tool which provides 99.9% of accuracy in the data and retain data quality for you.
Dynamic Pricing Complexity
While dynamic pricing is a game changing tool, its a bit complex is you never used it before and can took a while to get familiar about how it works.
Wants to know about dynamic pricing in detail? Check out our article Increase your Dynamic of Growth with Dynamic Repricing
Solution
To ease out the dynamic pricing strategy, there are platform which provides proper tour and always have a support for you whenever you are stuck, so you get no problem in getting familiar with tool and can use its resources properly.
Reach out if you are looking for such a platform, Dynamic Repricing.
Conclusion
In this vast and highly competitive market, price comparison is no longer an option, it is must to have tool. Whether its is a small business who wanted to understand market and expand it or a leading brand who always wanted to lead the market everyone should use price comparison to save efforts and time.
Price comparison solidify the roots of decision and strategy as they are backed by real time insight and accurate data..
So what are you waiting for, adapt modern tools for modern market and competition, so you can be the next leading company in your market.
