With burgeoning technology, increasing competition, active, connected consumers, greater transparency and availability of information -- eCommerce merchants more than ever need to seriously tend to their assortments, prices, and marketing in order to grow the biggest profits. To do this, you have to know what's going on in the market, identify the trends, know what your competitors have up their sleeves (and in their assortments), know what others are charging at any given time, and determine how best to meet and overcome those challenges. Here are 7 key ways competitive intelligence helps retailers leverage products, pricing, and profits for the greatest commercial success:
1. Enhance Product Assortment
With the use of product assortment intelligence and data analysis, you can review your and your competitors' products to find out what you have in common, what they have that you don't, and what you have that they don't, which will guide you to what to carry and how to price. You must build a timeline, identify trends, and plan ahead. Enhance your assortment by analyzing products that sell well -- regularly and at special times (like holidays) -- and then add these types of products and plan for them.
When you consider discontinuing products with low margins or low inventory turns, don't throw out the baby with the bathwater, like Walmart recently did, and then had to backpedal -- sharp data analysis will show you that a particular low-selling product might be the reason a customer shops with you! (New Science of Retailing by Marshall Fisher and Ananth Ranan).
2. Price Right!
Selling at the RIGHT price is the ONLY winning strategy. Selling at a price which is too HIGH or too LOW is a losing strategy. Using pricing intelligence data is the only way you can make informed, timely pricing decisions, with data available 24/7.
3. Sell more!
Increasing the average order size is a great strategy -- your data and intelligence will guide you on what to do. We've discussed all of these things in previous blog posts. Here are just a few examples:
* Product bundling. Sell one attractive product together with another.
* Offer volume discounts. Like bundling, you get rid of several items at once, and the customer usually gets a discount on volume.
* Cross-product sell within your own site. Present relevant related products on your product detail pages and within your shopping cart.
* Sell with psychology. Studies have shown that customers with 3 or 5 choices usually choose a product in the mid-to-higher range. If you don’t present those choices, you may sell the least expensive item, or worse, have them leave your site if they think you only offer a more expensive alternative.
* Sell Subscription Ordering. Provide products to subscribers through regular, pre-arranged subscriptions. (Manpacks - http://www.manpacks.com/ Men's company sends them handkerchiefs, socks, intimate needs, every month.
4. Enhance Your Marketing Efforts!
* Cross-sell each other's products with complementary retailers.
* Improve your conversion rate: If you already have the assortment and the data, you'll see that increasing conversion rate will provide the highest return on your investment.
* Do more remarketing. You already have the data on your customers, right? Use newsletters, email follow-ups during and after transactions; offer Facebook fans and Twitter followers deals on the products you know they like; recontact customers who haven't visited your site in a while, reminding them what you have to offer, with a deal or incentive to get them back.
5. Embrace New Sales Channels
In addition to competitive intelligence technology, online commerce is spilling over with multi-channel marketing and selling: Smartphones, Apps, tools for checkout, and ease of paying have all fast become essential and desired parts of effective, successful transactions -- and there's more to come.
6. Take care of Customers
We all learned in Sales 101 that it's far easier and cheaper to sell to an existing customer than to create and cultivate a new one. Ask your customers what they want. And listen to them. They like being involved, and what they say plays a very important part in what you should provide and what they will buy. You also already have a plethora of information on them so you can provide individualized shopper alerts, special prices, and custom-made coupons.
7. Develop New Markets
* Expand your offerings in a niche market if you generalize.
* Expand your offerings to a broader market if you are a niche marketer.
* Expand into Foreign Markets. Expanding internationally must be done with a good strategy and sufficient knowledge of local culture and needs, including the language in which the customer is comfortable shopping.
There you have it: 7 Ways Competitive Intelligence Helps Retailers Leverage Products, Pricing & Profits. Pricing and assortment intelligence tools enhance your ability to price, grow, compete, gain customers and sales, and make a profit. Pricing right is the most important element for your well-being and success. Product assortment intelligence is necessary to stay up with, and ahead of, your competition. Treat your existing customers well; reward loyalty, and give them reason to continue to shop with you. Continue to find new markets, and use new, creative, and sound ways to market effectively to the customers you already have, thanks to your use of competitive intelligence.
What other ways do you see technology helping increase profits? Gilon