E-Tailers that operate on slim margins strive for higher conversion rates through better competitive pricing intelligence.
Build.com, an online-only home improvement merchandise retailer, is driving conversions and revenues with a real-time price intelligence tool from 360pi. The 360price technology actively monitors product offerings from hundreds of retail web sites to deliver price comparisons for exact matches and similar products. The solution provides Build.com with real-time visibility into competitors’ constantly changing prices on home improvement SKUs.
“The atmosphere of e-Commerce is always changing,” said Devin Van Hout, Chief Merchant for Build.com, in an interview with Retail TouchPoints. “We face the challenge of regularly staying at the forefront of price optimization. Our competitors change prices on products monthly, weekly and even hourly, so we wanted a solution to give us visibility into market fluctuation and reactions.”
Now with increased speed, accuracy and depth of market knowledge “we have a vast amount of insight into our placement within the market on a category, sub-category and even individual product level,” Van Hout stated. “We can also track competitor reactions to past price changes to help us forecast results before we implement new strategies.”
Right Price Vs. Lowest Price
Prior to adopting the 360price solution, Build.com manually examined pricing within competitors’ top product categories but could not access more granular data such as SKU elasticity.
“We had some blind spots,” Van Hout said. “We were managing price based on assumptions, and in a very reactionary way. In certain cases we were losing profits because we were price matching on too broad of a spectrum.”
Today, when a competitor makes a price change, price transparency allows Build.com to determine if it should follow suit. “The lowest price is not always the best price, based on the service level of the offer,” Van Hout stated. Price optimization technology “allows us determine the right price to increase sales and profitability: If we see our price is too low, we know we’ve been leaving profits on the table. If it’s too high, we may have been losing sales, revenues and market share to competitors.”
The price optimization solution also allows Build.com to enact new pricing strategies. For example, “If we want to get more aggressive in any one area,” Van Hout explained, “we can test that approach. In addition, during the implementation process, we are able to experiment with different system features then create tools that are unique to our landscape within the market.”