Online shopping cart abandonment rates have skyrocketed in recent years, thanks to online shoppers who are proficient at scouring the Internet for the best deals before making a purchase. As a consequence, online retailers are losing billions of dollars in revenue due to shopping cart abandonment.
Traditionally, online retailers have relied on several techniques to recapture abandoned carts: improving the online checkout process, reducing or eliminating shipping fees, expanding ordering options, and remarketing via email.
Competitive price intelligence is another tactic to supplement these traditional methods. This refers to computer-based systems that identify, compare and analyze pricing and other revenue-impacting data for a business’ own operations as well as its competitors.
The reality is that three groups – retailers, competitors and customers – need a clear picture of the competitive pricing landscape and comprise a triangle of pricing transparency. With comparisons on products and services now available round the clock, seasoned online shoppers have clear visibility to volumes of pricing data.
Competitors may have this same information. An online retailer who lacks this visibility is, in effect, working blind from its point of the triangle.
And it’s not only transparency of price that affects retailers. Product availability, shipping charges, consumer rankings and reviews and taxes are similarly available, and similarly evaluated by consumers before making a purchase decision.
Retailers must have the right intelligence to stay a step ahead, proactively participating in this transparent marketplace to compete for business and win customers.
Competitive price intelligence provides information on relevant product attributes that matter most to managers charged with establishing and implementing pricing strategy, and it does so at a granular level. Managers can customize and choose the attributes they want to monitor.
And while accurate competitor price comparison is central to price intelligence, advanced systems also provide individual sorting, filtering and report configuration for all available product criteria, exception reports, configurable alert notifications, time series analysis and meet/beat ratios.
Just as important as price is the qualitative information consumers use in decision-making. Today’s competitive price intelligence systems incorporate rankings and reviews – a more complex and subjective realm than quantitative price data.
But more price intelligence vendors are providing extracted data results online with simple browser-based access. Easy-to-read dashboard reports are becoming mandatory to support strong decision-making.
Competitive price intelligence products fall into one of three categories:
- Technology-savvy products
- Focused business solutions
- Advanced-technology business solutions
Technology-savvy products include advanced aggregators that provide a wealth of pure data. Focused software providers often provide products that cater to specific industries, but also often lack the ability to provide advanced data extraction and analytics on qualitative rankings and ratings. Advanced technology business solutions bring the best technology and industry systems together, offering qualitative and quantitative information.
Given the wide variation in competitive price intelligence offerings, what should you look for in evaluating them? A comprehensive system for ecommerce will typically offer the following criteria:
- Individual sorting, filtering and report configuration for all available product criteria – both quantitative and qualitative. Quantitative attributes go beyond price to include product name and description, model configurations, shipping costs and times, assortments, warranties, service terms and taxes.
- Monitoring and extracting of customer reviews and rankings from individual brand websites, as well as price comparison sites.
- Data extraction from consumer-facing websites, giving managers the ability to see everything shoppers see when researching and purchasing online
- Simple dashboard reports that clearly highlight possible threats and opportunities
- Automated exception reports
- Time series analysis
- Meet/beat ratios
- Configurable alert notifications
- Scatter graphs for discount campaigns, new products, sell-offs
- SaaS-based, using cloud computing (24/7 availability)
Each vendor will integrate qualitative and quantitative data differently. All available data should be easily accessible and easy to read, with analytics available in easy-to-pull and use formats.
Today’s connected and increasingly mobile world means consumers will continue to comparison shop for the best deals and prices. The good news for all the lonely shopping carts out there is that there are effective new ways to address online abandonment.
Christian Koestler ([email protected]) is president/ CEO of Lixto, a provider of web data extraction and analysis for the retail, hotel and consumer products industries.