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