Price Benchmarking: Strategic Benefits for Retail
In today’s highly competitive retail market, where prices can change frequently, it’s crucial for retailers to constantly monitor their prices to ensure they are offering the best value to customers. This is especially true in the grocery segment, where competition is fierce.
Price Benchmarking:
Price benchmarking is the process of comparing your prices to those of your competitors in a specific market segment. This process helps retailers stay ahead in the market by ensuring their prices are competitive.
Benefits of Price Benchmarking
Develop Pricing Strategy: Benchmarking your prices helps you find areas where you can improve your pricing strategy. For example, you might catch that your prices are significantly higher than a key competitor, so you adjust your price to be only 5% higher.
Increase Market Share: Adjusting prices can help attract more customers so you gain market share.
Improve Cost Structure: If you discover your prices are higher than your competitors’, you might look for ways to reduce costs. This could involve reducing costs of raw materials, improving production efficiency, or cutting back on marketing expenses.
Realize Trends: Price monitoring helps retailers stay informed about pricing trends and changes in consumer demand. Make informed decisions about your pricing strategy and stay ahead of the competition.
Tips: Retail Price Monitoring
As a retail businesses, you’ll most effectively monitor prices through a competitive intelligence program. Here are some tips:
- Reliable Product Matching: Price comparisons start by matching exact and similar products at scale. Bungee Tech’s product matching process provides your team with the data they need to make informed pricing decisions.
- Location-Level Data: Competitive intelligence solutions should provide geographic data so that you can improve pricing based on a specific location.
- Beyond Price: Leverage competitive intelligence to track other critical data points like promotions, assortment, and availability.
- Automation: The best competitive intelligence solutions automatically generate actionable analytics based on your data.
Your Competitive Advantage
Price benchmarking goes beyond price comparison, it’s also about analyzing product availability and gaining visibility into assortment gaps.
Competitive intelligence offers a unique advantage where you get access to digital, zip-code level data to account for all consumer preference drivers – from value and experience to availability and quality – and evaluate them against the competition.
It’s a competitive market. Shoppers are trying new channels and loyalty is low. Having the right prices is an important part of retail success. By the way, whether you adjust prices or not – knowing your place in the overall market is a true advantage.
By comparing (or benchmarking) your prices against other retailers, you can identify opportunities to improve strategy, adjust assortment, and increase market share. The more data you have about your business, the better decisions you can make.
Price Monitoring with Bungee Tech
Retail businesses need support from a powerful data and analytics engine to track competitor prices effortlessly. Bungee Tech offers a proven way to gather and analyze data from your competition, making pricing a core capability for retailers. Request a demo >
