An important part of pricing is checking the competitors’ prices
According to Ecommerce News, many retailers in the UK underestimate the importance of price and simply don’t monitor prices at all. And when they do, they are spending too much time on this. This can be concluded from research done by Omnia Retail. The company surveyed 150 retailers (34% pure players, 43% omnichannel and 23% bricks and mortar) across the United Kingdom to ask them about whether and how they automate pricing. Almost all retailers said they have a pricing strategy in place, but only 43% see it as important. Over one in five (27%) would even describe it as ‘very important’. But a further 20% of UK retailers see their pricing strategy as (very) unimportant.
An important part of pricing is checking the competitors’ prices. Omnia Retails says that British retailers are committing far too much resource to competitor price checking. On average, they spend 10 hours per week doing this, which suggest that they aren’t doing this efficiently. Over half of retailers say they spend 1-10 hours to monitoring market pricing, with a quarter saying they commit 11 to 25 hours per week to this practice.
One in ten brands even spend between 26 and 50 hours doing this; the equivalent of one full-time salary.
Retailers may check prices, but this doesn’t automatically mean they do something with this information. As a matter of fact, 3% of retailers say they never alter their product prices, while a quarter only change their prices about once or twice a year. And a third only do it sometimes or several times annually, the research shows.
There are several reasons to alter your product prices. A popular one is because your competitors are doing it or because they simply offer the same products for a much lower price. Almost half of retailers surveyed say they base their pricing on that of their competitors. Another 41% alter their prices based on the season. For example, they heavily discount their festive products immediately after Christmas.
And about one in four retailers take the weather into account when changing the prices.