How to Win Price Wars?
"All is fair in war".
How many times have you heard this proverb? But have you applied it to your business?
Price wars in e-commerce are by no means a new concept. A price war is an appropriate term because, like a regular war, it brings a lot of sacrifices and it is very difficult to get out of it as a winner.
What are the dangers of price wars? And what can be done to effectively manage them? The war in this case consists of the fact that competing companies lower prices for products or services, trying to attract as many customers as possible and at the same time delete rivals from the market.
Historically, traders have always resorted to lowering their prices to get ahead of their competitors. In today's e-commerce world, the rise in price wars also provokes the emergence of fast-growing online sales channels such as marketplaces. For example, analysts point out that on Amazon, price wars can happen tens of thousands of times a day and change within minutes. The industry is so advanced that sellers can change their pricing policy with one click.
1. Research and analyze the market.
Before heading out to the "battlefield", weigh the pros and cons. Investigate why your competitor has cut prices. Assess the market situation as a whole and analyze the risks of joining the fight specifically for your company. Indeed, on the one hand, this is a way to quickly survive a competitor and take a leading position, but on the other hand, for a company that is not ready to hold dumping for a long time and suffer losses, this can lead to a significant loss of profit.
2. Use methods of attracting without reducing prices.
Get creative. The more bonuses your customers see in your products or services, the more likely they are to buy them from you and not from your competitors. Promote the purchase with a free gift, use joint offers, provide customers with additional bonus points and other "goodies". In addition to all this, this will significantly increase the likelihood that the client will come back to you again.
3. More marketing, more customers.
Nowadays, properly constructed advertising more often attracts the right customers than the minimum prices for the products. Consider new opportunities for additional advertising of your offers on social networks and other resources, and the results will not keep you waiting long.
4. Take care of your brand reputation.
Instead of looking for the weaknesses of your competitors, focus on your strengths and strengthening them. Perhaps your customer service is superior to your competitors. Or maybe you have a more personal touch. Point out what it is that you provide better than others, and continue to do so. Offer quality products or services. For consumers, even the lowest price cannot compare to a good experience and the ability to trust the brand from which they buy.
5. Automate the processes of monitoring price wars.
To react quickly to all market movements, you must always be aware of the events. If you want to keep up with your competitors, manually tracking their prices is out of the question. Step forward and automate this step. Price monitoring technologies have developed so much that it will be many times more rational for your company to connect an online price optimization service that will collect and analyze information for you, while also will provide the option to understand a further pricing scenario. One of these services is the multifunctional monitoring platform Z-PRICE, which will simplify your life in this matter.
So, we covered 5 points that will help you be a worthy contender in price wars and increase your chances of capturing more market share. Use all methods as much as possible, and not some separately, and then the results will not keep you waiting long.