future of online retail
DESCRIPTION
What's in store for the future of online retail? In a world starved for growth, online retail is a bright spot: the industry is projected to grow 62% overall in the next couple of years. At the same time, no growth spurt comes without growing pains, and the smartest retailers know that the playing field will continue to change. WisePricer has identified five key concepts that the best e-‐retailers already know and practice.TRANSCRIPT
The New Rules What the Winners of Online Retail
Already Know
#FutureOf Online Retail In a world starved for growth, online retail is a bright spot: the industry is projected to grow 13% in 2013 alone, and to grow 62% overall in the next couple of years. At the same Hme, no growth spurt comes without growing pains, and the smartest retailers know that the playing field will conHnue to change. We have idenHfied five key concepts that the best e-‐retailers already know and pracHce.
1. Finding a Niche 2. CompeHtor Monitoring 3. Data IntegraHon 4. Pricing Strategy 5. Dynamic Pricing
Online shopping has become a ubiquitous part of many consumers’ lives and in many ways, online retail has become a subs;tute for brick-‐and-‐mortar retail, rather than just a supplement.
More marketplaces, richer websites and more selling channels have made it more compe;;ve than ever before. Pricing has become the last line of defense for many e-‐retailers, but with a more complicated and saturated marketplace, it has become nearly impossible for e-‐retailers to manually monitor product prices and compe;tors across channels. The barriers to entry in e-‐retail have never been lower. Fundamentally, the rules of the eCommerce game have changed.
Specialize and stand out. It’s no longer “special” to sell products online. eCommerce is a textbook example of perfectly compe;;ve markets. The industry has low barriers to entry and many small players selling uniform, standardized products. Consumers are in the driver’s seat and pricing follows their preferences. In order to survive in such a market, you need to carve out your niche and create your own “submarket”. By specializing, you insulate yourself from price compe;;on.
You must constantly track compe;tors in order to have an accurate idea of what the compe;;on looks like, and to effec;vely respond. Today, price fluctua;ons change every day. Retailers have started to demand beOer data analysis and capture tools. Automated repricing tools allow retailers to respond immediately to pricing changes in the market, making the manual approach to tracking dynamic markets a thing of the past. Consequently, it’s no longer possible to compete in eCommerce without on-‐demand, dynamic pricing data. So arm yourself with the weapon of pricing knowledge and invest in a pricing intelligence solu;on that is right for you.
As an e-‐retailer, you have the advantage of having all your data in digital form already. The next step is to look at it holis;cally—integrate it into a complete, objec;ve view of your business—and use it to analyze what can be improved upon. Track and u;lize data for: ² Consumer Insights ² Tracking Opera;onal Efficiency ² Inventory Management ² Sales Forecas;ng ² Improving Promo;onal Targe;ng ² Develop Channel-‐specific Strategies ² Compe;;ve Pricing Intelligence ² And more Leverage the integrated data to capture a greater overall market share.
Keep a cool head. Pick a price strategy that works with the kind of product you are selling. The prices you set for your products should be informed by: ² Market prices ² Consumers’ price tolerance ² Supply chain capacity Use an overarching strategy to guide your compe;;ve plan and layer addi;onal strategies for maximum compe;;ve flexibility.
Major retailers with an online presence already u;lize dynamic pricing strategies to capture more market share. Un;l recently, dynamic pricing remained the domain of big retailers like Amazon, who had the budgets to create pricing tools in-‐house. Moreover, a lack of good, quality data and pricing exper;se barred most retailers from using dynamic pricing tools. But that was five years ago. Now, dynamic pricing solu;ons at mul;ple price points exist, opening up opportuni;es for smaller retailers to start integra;ng dynamic pricing into their overall pricing strategy. Dynamic pricing can be performance or compeDDon-‐based. You will know when to lower or raise your prices if you carefully watch your internal performance and your compe;tors’ movements. This is where proac;ve price monitoring is important—it allows you to respond to compe;;on in real-‐;me.
About WisePricer WisePricer is a dynamic pricing & merchandising engine that monitors, analyzes and reprices products in real-‐Hme. With features like automated repricing, customizable rules and seamless syncing, WisePricer makes it easier for retailers to beat their compeHHon and increase sales and profits. Download the complete whitepaper at wisepricer.com/successkit Check out our blog for more ;ps, trends, and strategies on all things ecommerce blog.wisepricer.com