Research show that 80% of shoppers compare prices online before shopping in stores.
Here’s how e-commerce stores can benefit from the growing hordes of price-comparison customers:
“Bankruptcy by a thousand cuts” – the art of driving your e-commerce competitors crazy by constantly undercutting them with razor thin margins.
Constantly and immediately undercutting your competitors prices by micro-amounts will drive them crazy with frustration and most importantly; steal all the price comparing customers under their feet.
But practically – how is it done? Lets try a little exercise.
Start up excel.
Make a list of all the products you sell.
Make a list of all your competitors.
Go to your competitors sites. Find the exact same products on each competitors sites.
Note down the competitors’ prices. Every single competitor. Every single product.
Compare and check if you are off on price. (Because price-comparison customer will…)
Prices get updated constantly, so do this every day.
If you have 2000 products, 4 competitors and each check takes 60 seconds you should be done in 133 hours.
Per day. No coffee breaks for you!
I think we can conclude that manual labor is not going to work…
…but within that seemingly impossible task lies a huge opportunity.
The opportunities in e-commerce retail are huge, but competition is fierce – especially if you are selling the same products as other stores.
More and more customers make price comparisons online, and a very large part of sales go to the store with the lowest price.
When customers rely on price comparison, the go-to strategy for acquiring customers becomes selling the product at the lowest price on the market, and then leverage the sale with up-sells, cross-sells, bundling and of course building a customer relationships for extra profit.
Over the long term you may not want to rely on price as your sole differentiator for the first sale. Over the long term you probably want to pry your customers away from price comparison with branding, and perhaps your own product line, but in the long term we are all dead.
But right now – in the face of online price comparisons – if you need to get customers in the door, you need to have the lowest price.
But… if the trick to attracting customers is to have the lowest price then the trick to making profit on those customers is to have lowest price by a razor thin amount.
Causing your competitors “Bankruptcy by a thousand cuts”
You want to be the lowest price, but there is no point in selling your product for $149 if the second cheapest competitor is selling it for $169. You could be lowest at $168 and still get the sale. You would be throwing away $19 on every sale.
For perspective; just 10 sales per day where you are missing out on $19 because you are not setting optimal prices is $69,350 of bottom line pure profit left on the table per year.
Ideally you would sell each and every one of your products only a few dollars cheaper than your nearest competitor.
If you know the price of your products on all your competitors sites, all the time, you can always undercut them by a razor thin margin and steal all the price-comparing customers under their feet.
Practically, this has been impossible until today.
We have created software for a large e-commerce company that does exactly that. It uses AI and clever subterfuge to find your products on competitors’ sites, check the price on them and compile a price report with any suggested edits highlighted every day.
The software is hard at work for a large e-commerce company right now, making them a pile of money. That same software is now available as a service to a few more customers.
If you are interested, make an appointment for a phone meeting with us.
Automatic price comparison is not a trivial task and requires a bit of setup, so we need to have a talk for us to deliver.
Schedule a 25 minute phone meeting on the next page. We will call you on the booked date and time and have a chat. We won’t pressure-sell you or anything stupid like that.