Which factors influence online shoppers’ decisions at most?

How do they choose whether to buy a certain product from one online store or another?

Currently, several stores have the same products in their offers – it is especially true for commodity goods, such as FMCG products or electronics. As an example, on average 18 retailers offer the same product on Google Shopping in Germany, according to the “Trends in the electronics and household appliances market” report.

In such cases, many customers compare online prices before the purchase; price is one of the most important factors when they make the decision which store to choose. That’s why each store that wants to position its products well should be able to track competitors’ prices real-time. How to use competitor price tracking software for that purpose?

Price tracking – why is it so important?

Why do big online retailers invest thousands of dollars in data about their competitors’ prices?

That’s because the price is deemed one of the most important factors in customers’ purchasing decisions. The popularity of marketplaces only accelerates this trend – it’s easier than ever before to compare prices by sorting the offers by price. If a customer does it – he usually doesn’t scroll through to the 10th position but chooses one from the top.

Online retailers are aware of that and constantly use competitor price tracking to adjust their prices to the new market situation. As an example, if a competitor lowers his prices and jumps before the online store in the ranking on e.g. Google Shopping – the retailer can quickly lower his price as well to be still at the top. The graphic below shows well the mechanism of price automation based on market data. In this case, a small price reduction led to a significant improvement in the competitive position:

Manual competitor price tracking

In the past, companies would use manual competitor price tracking to compare their prices with competitors. In the case of traditional retail, it included visiting physical stores. In e-commerce, it means visiting each competitor’s website to track their prices.

Why is this method of price tracking not valid anymore?

It’s mostly because of the price dynamics in e-commerce. Amazon is believed to make millions of price change every day. As the report “Trends in the electronics and household appliances market shows”, there are on average more than 1 price changes per product on the most relevant price comparison websites and marketplaces. The manual competitor price tracking can be tough also because the number of competitors in e-commerce is relevant. Just have a look at the infographic below:

It means that if you offer 1000 electronics products in Germany on Idealo, there are on average 16 400 offers you should analyze to get the full picture. How much time would you spend on that? Probably too much. That’s when the automatic solutions come in handy.

Competitor price tracking software

Competitor price tracking software, also known as competitor price monitoring tool, helps in organizing data about prices in one clear tool. After choosing which websites you want to track prices on and products which you want to monitor, you get a clear overview of the market situation.

Below, you can see an exemplary situation in which a shop can see how its prices (“SHOP’S PRICE”) compares to the other stores (e.g. for TV01 there are 14 competitors in total, one of which sells cheaper than the analyzed store. We can see it by its place in the ranking):

How does competitor price tracking software work?

Competitor price tracking software gathers data about prices from the market. It is based on 3 main steps:

  • Data crawling –  data is gathered from different sources with the data crawling mechanisms. Algorithms that are used to track prices are developed and continually improved by developers’ teams to make sure data quality is on the highest level.
  • Data matching – based on Machine Learning suggestions and manual verification, crawled data about prices is matched with proper products.
  • Data presentation – all the gathered data is presented in an online panel so that users can compare their prices with competitors in an intuitive way. Data is shown on charts as well.

Thanks to these steps, users of price monitoring software can save time because all the data is readily available and updated even a few times every day. What’s more, thanks to the high quality of data, they can automate their pricing so that it always fits the current market situation.

Manual competitor price tracking vs automated software – summary

Price tracking in the dynamic e-commerce environment is inevitable if an online store wants to position itself well for key products. Using competitor price monitoring software can help in acquiring such data faster, more accurately and cheaper than by performing hours-long manual price comparisons. If you want to start using price tracking software: prepare a list of products you want to monitor, websites you want to track and contact the provider of a price tracking software to track and adjust prices automatically!