The DataWeave Blog

Author: Shailendra Nagarajan

The Complete Guide to Competitive Pricing Strategies in Retail and E-commerce

Your budget-conscious customers are hunting for value and won’t hesitate to switch brands or shop at other retailers.

In saturated and fiercely competitive markets, how can you retain customers? And better yet, how can you attract more customers and grow your market share? One thing you can do as a brand or retailer is to set the right prices for your products.

Competitive or competition-based pricing can help you get there.

So what exactly is competitive pricing? Let’s dive into this strategy, its advantages and disadvantages, and how it can be used to stay ahead of the competition.

What is Competitive Pricing?

Competitive or competition-based pricing is a strategy where brands and retailers set product prices based on what their competitors charge. This method focuses entirely on the market landscape and sets aside the cost of production or consumer demand.

It is a good pricing model for businesses operating in saturated markets, such as consumer packaged goods (CPGs) or retail.

Competitive Pricing Models

Competitive pricing isn’t a one-size-fits-all strategy. The approach includes various pricing models that can be customized to fit your business goals and market positioning.

Here’s a closer look at five of the most common competition-based pricing models:

Price Skimming

If you have a new product entering the market, you can initially set a high price. Price skimming allows you to maximize margins when competition is minimal.

This strategy taps into early adopters’ willingness to pay a premium for new project categories. As competitors enter the market, you can gradually reduce the price to maintain competitiveness.

Premium Pricing

Premium pricing lets you position your product as high-quality or luxurious goods.

When you charge more than your competitors, you’re not just selling a product—you’re selling status and an experience. This strategy is effective when your offering is of superior quality or has unique features that justify a higher price point.

Price Matching

Price matching—also known as parity pricing—is a defensive pricing tactic.

By consistently matching your competitors’ prices, you can retain customers who might otherwise, be tempted to switch to an alternative.

This approach signals your customers that they don’t need to look elsewhere for what they need and can feel comfortable remaining loyal to your brand.

Penetration Pricing

Penetration pricing is when you set a low price for a new product to gain market share quickly. The opposite of price skimming, this strategy can be particularly effective in price-sensitive or highly competitive industries.

By attracting customers early, you can also deter some competitors from entering the market. This bold move can establish your product as a market leader from the get-go.

Loss Leader Pricing

Loss leader pricing is a strategic sacrifice that can lead to greater gains in the long run.

By offering a product at a low price—sometimes even below cost—you can attract new customers to your brand and strengthen your current customers’ loyalty.

Eventually, you can cross-sell other higher-margin products to your loyal customer base to cover the loss from your loss leader pricing and increase sales of other more profitable products.

Key Advantages of Competitive Pricing

Although it’s not the only pricing strategy available, competitive pricing has some significant advantages.

It is Responsive

Agility is synonymous with profit in industries where consumer preferences and market conditions shift rapidly.

Competitive pricing allows you to adapt quickly—if a competitor lowers their prices, you can respond promptly to maintain your positioning.

It is Simple to Execute and Manage

Competitive pricing is straightforward, unlike cost-based pricing, which requires complex calculations and spans various factors and facets.

By closely monitoring competitors’ prices and adjusting your prices accordingly, you can implement this pricing strategy with relative ease and speed.

It Can Be Combined with Other Pricing Strategies

Competitive pricing is not a standalone strategy—it’s a versatile approach that can easily be combined with other pricing strategies. For example, say you want to use competitive pricing without losing money on a product. In this case, you could use cost-plus pricing to determine a base price that you won’t go below, then use competitive pricing as long as the price stays above your base price.

Key Disadvantages of Competitive Pricing

While competition-based pricing has its advantages, it’s not without its pitfalls. Here are some potential disadvantages of competitive pricing.

It De-emphasizes Consumer Demand

If you focus solely on what competitors are charging, you could overlook consumer demand.

For example, you could underprice items that consumers could be willing to purchase for more. Or, you might overprice items that consumers perceive as low-value, which can reduce sales.

You Risk Price Wars

If you and your competition undercut each other for customer acquisition and loyalty, you will eventually erode profit margins and harm the industry’s overall profitability. It’s a slippery slope where everyone loses in the end.

There’s Potential for Complacency

When you base your prices on beating those of competitors, you might neglect to differentiate your offerings through innovation and product improvements. Over time, this can weaken your brand’s position and lead to a loss of market share. Staying competitive means more than just matching prices—it means continuously evolving and adding value for the consumer.

4 Tips for a Successful Competitive Pricing Strategy in Retail

Here are four competition-based pricing tips for retailers:

Retailer Tip #1. Know Where to Position Your Products in the Market

For competitive pricing to work, you must understand your optimal product positioning in the overall market. To gain this understanding, you must regularly compare your offerings and prices with those of your key competitors, especially for high-demand products.

Then, you can decide which competition-based pricing model is suitable for you.

Retailer Tip #2. Price Dynamically

Dynamic pricing is a tactic with which you automatically adjust prices on your chosen variables, such as market conditions, competitor actions, or consumer demand.

When it comes to competitive pricing, a dynamic pricing system can track your competitors’ price changes and update yours in lockstep.

Price-monitoring tools like DataWeave allow you to stay ahead of the game with seasonal and historical pricing trend data.

Retailer Tip #3. Combine Competitive Pricing with Other Pricing Strategies

Competitive pricing can be powerful, but it doesn’t have to stand alone. You can enhance its benefits with complementary marketing tactics.

To illustrate, you can bundle products to offer greater value than what your competitors are offering. You can also leverage loyalty programs to offer exclusive discounts or rewards so customers keep returning, even when your competitors offer them lower prices.

Retailer Tip #4. Stay in Tune with Consumer Demand

Competition-based pricing aligns you with your competitor, but don’t lose sight of what your customers want. Routinely test your pricing strategy against consumer behavior to ensure that your prices reflect the actual value of your offerings.

5 Tips for a Successful Competitive Pricing Strategy for Consumer Brands

If you’re thinking about how to create a competitive pricing strategy for your brand, consider these five tips:

Brand Tip #1. Identify Competing Products for Accurate Comparisons

The first step in competitive pricing is to know the value of what you’re selling and how it compares to that of your competitors’ products. This extends to private-label products, similar but not identical products, and use-case products.

Product matching ensures your pricing decisions are based on accurate like-for-like comparisons, allowing you to compete effectively.

Brand Tip #2. Understand Your Product’s Relative Value

Knowing how your product competes on value is key to setting the right price. If your product offers higher value, price it higher; if it offers less, price it accordingly. This ensures your pricing strategy reflects your product’s market placement.

Brand Tip #3. Consider Brand Perception

Even if your product is virtually the same as a competitor’s, your brand’s perceived value may be different, which plays a crucial role in pricing.

If your brand is perceived as premium, you can justify higher prices. Conversely, if customers perceive you as a value brand, your pricing should reflect affordability.

Brand Tip #4. Leverage Value-Based Differentiation

When your prices are similar to competitors’, you must differentiate your products by expressing your product value through branding, packaging, quality, or something else entirely.

This differentiation will compel consumers to choose your product over other similarly priced options.

Brand Tip #5. Stay Vigilant with Price Monitoring

Your competitors will update their pricing repeatedly, and you will, too.

It can be difficult and time-consuming to monitor your competitive pricing, so you’ll need a system like DataWeave to monitor competitors’ pricing and manage dynamic pricing changes.

This vigilance ensures your brand remains competitive and relevant in real time.

4 Essential Capabilities You Need to Implement Successful Competition-Based Pricing

You’ll need four key capabilities to implement a competitive pricing strategy effectively.

AI-Driven Product Matching

Product matching means you’ll compare many products (sometimes tens or hundreds) with varying details across multiple platforms. Accurate product matching at that scale requires AI.

For instance, AI can identify similar smartphones to yours by analyzing features like screen size and processor type. DataWeave’s AI product matches start with 80–90% matching accuracy, and then human oversight can fine-tune the data for near-perfect matches.

You can make informed pricing decisions once you know which competing products to base your prices on.

Accurate and Comprehensive Data

A successful competition-based pricing strategy depends on high-quality, comprehensive product and pricing data from many retailers and eCommerce marketplaces.

By tracking prices on large online platforms and niche eCommerce sites across certain regions, you’ll gain a more comprehensive market view, which enables you to make quick and confident price changes.

Normalized Measurement Units

Accurate price comparisons are dependent on normalized unit measurements.

For example, comparing laundry detergent sold in liters to laundry detergent sold in ounces requires converting either or both products to a common base like price-per-liter or price-per-ounce.

This normalization ensures accurate pricing analysis.

Timely Actionable Insights

Timely and actionable pricing insights empower you to make informed pricing decisions.

With top-tier competitive pricing intelligence systems, you get customized alerts, intuitive dashboards, and detailed reports to help your team quickly act on insights.

In Conclusion

Competitive pricing or competition-based pricing is a powerful strategy for businesses navigating crowded markets, but you must balance competitive pricing with your brand’s unique value proposition.

Competitive pricing should complement innovation and customer-centric strategies, not replace them. To learn more, talk to us today!

October 14, 2024
5 Must-Have Capabilities of Your Ideal Competitive Pricing Intelligence Solution

In the cutthroat world of retail, where razor-thin margins and fierce competition reign supreme, pricing becomes your secret weapon to driving sales. The magic bullet unlocks sales, attracts customers, and ultimately fuels your bottom line. But with ever-changing market trends and competitor tactics shifting constantly, effective pricing strategies become even more crucial.

A recent Bain & Company study highlights this very point. 78% of respondents acknowledged that their pricing decisions could be improved, leaving significant revenue untapped. John Furner, President and CEO of Kroger, echoes this sentiment. In a press release announcing a new pricing strategy, he emphasized their commitment to “providing our customers with predictable, affordable prices on the products they need most.” This focus on transparent and consistent pricing reflects the growing importance of building trust with customers, where value goes beyond just the lowest price tag.

The right pricing strategy can unlock a treasure trove of benefits for retailers, including attracting new customers, boosting sales, and ultimately increasing their bottom line.

But here’s the challenge: keeping pace with market trends and competitor strategies requires constant vigilance. This is where an advanced, user-centric pricing intelligence tool comes into play. Retailers need a platform specifically designed to address their unique challenges. It should empower them to protect margins, create a seamless pricing process, and attract and retain price-sensitive customers. To help you navigate this landscape, we’ve identified the must-have capabilities of a pricing intelligence solution that will transform your pricing strategy and propel your business toward long-term success.

1. Reliable and Accurate Data Collection

Retailers need a competitive intelligence solution that goes beyond merely capturing information en masse from competitor sites. An ideal solution ensures that data is consistent, extensive, and highly accurate, with an added level of granularity. This is achieved through statistical process control methods for data quality assurance, enabling highly accurate data capture and processing.

Such a platform should be capable of scraping data from various sources, including desktop sites, mobile sites, and mobile applications, as well as a variety of online platforms: aggregators, omnichannel retailers, delivery intermediaries, quick commerce platforms, D2C sites, and more. This versatility ensures that data is captured across any global region and in dozens of languages, making the system geography and language agnostic.

DataWeave’s solution includes a fast and automated data source configuration system, enabling a swift setup of new web sources for data capture. This capability ensures that retailers can stay ahead of the curve as the market landscape and competitor strategies evolve.

An effective competitive pricing intelligence solution allows retailers to move away from working with incomplete or inaccurate data and instead leverage a comprehensive information stream to create strategic pricing decisions and optimize their overall business strategy. At the end of the day, the insights you base your decisions on are only as good as the data you aggregate. Even with the world’s best analytics engine, it’s always a case of “garbage in, garbage out.”

2. Hyperlocal Insights From Store-Level Data

Monitoring pricing and availability across specific stores is crucial for retailers to gain critical insights into a vast network of locations, enabling them to make strategic decisions that enhance pricing strategies and supply chain effectiveness, thereby minimizing stockouts or pricing inefficiencies in key markets. A platform like DataWeave provides retailers with a comprehensive view of store-level data across ZIP codes, maintaining a hyperlocal competitive strategy. It offers detailed visibility into product availability, highlighting out-of-stock scenarios across different competitors. This capability is invaluable, allowing quick identification of price improvement opportunities and providing retailers with a bird’s eye view of where products can be priced higher than usual to gain margins.

The system operates at configurable intervals—daily, weekly, or monthly—enabling retailers to keep a vigilant eye on pricing, product availability, and delivery timelines based on the selected fulfillment option. Unlike many other providers who offer limited insights from a sample of stores, this solution delivers exhaustive analytics from every storefront. This comprehensive approach grants retailers (and brands) a strategic edge, facilitating efficient inventory tracking, precise pricing adjustments, and rapid responses to fluctuating market dynamics.

3. Sophisticated, AI-Powered Product Matching

A solution that matches products accurately at scale is essential for a robust and reliable competitive pricing strategy. Advanced platforms use unified systems for both text and image recognition to accurately match similar SKUs across thousands of eCommerce stores and millions of products. Deep learning architecture is employed to develop unique AI that matches text and images, grouping similar products based on their features, ensuring accurate matches even for private label products.

This AI identifies critical elements of products in images, such as focusing on the top half of a model wearing a shirt, the sleeve length, the color of the product, etc.. Deep learning models, trained on extensive datasets of images, enhance these images by removing irrelevant background details and improving the quality of the core product image. Innovative AI then extracts unique signatures from the photos, allowing for quick and efficient identification and grouping of products across billions of indexed items.

No matter how powerful the AI, combining it with human expertise is key to achieving true data veracity—ensuring accuracy, freshness, and comprehensive coverage required for reliable product matching. A human-in-the-loop approach elevates the AI-powered product matching process by addressing key challenges. AI algorithms may initially identify product matches with 80-90% accuracy, but human validation corrects errors, pushing accuracy closer to 100%. Humans apply contextual judgment for subjective criteria like aesthetics and design, making nuanced decisions that quantitative rules might miss. Continuous learning through an iterative feedback loop allows AI models to quickly adapt to changing trends and preferences as human experts provide context and re-label incorrect predictions. By integrating AI’s automation and scale with human validation, judgment, and knowledge curation, pricing intelligence solutions can achieve the accuracy and coverage necessary for actionable competitive pricing insights.

This approach results in retailers being able to match products and compare prices between identical products, similar products, and private label brands.

4. Unit of Measure Normalization

Effective product matching and grouping are crucial for maintaining competitive pricing, but this requires a tech stack that can normalize units of measure across various sites. For example, a 10.75oz can of chicken noodle soup priced at $3 may seem cheaper than a 12.90oz can priced at $3.20, but this isn’t always the case. Initially, the larger package might appear more expensive, but when prices are compared based on the same unit amount, it often offers better value. Therefore, it is essential for retailers to standardize units to accurately compare prices. Advanced technology goes beyond simply matching products; it ensures accurate comparisons by normalizing unit measurements, including weight, quantity, and volume—crucial factors for establishing a clear pricing picture across competitors.

Imagine comparing soup prices regardless of whether they are advertised in ounces, milliliters, or liters. By normalizing unit measurements, retailers can develop tailored pricing strategies on a level playing field, eliminating the risk of being misled by seemingly lower prices that conceal smaller quantities. Unit normalization allows retailers to uncover hidden value propositions by accurately determining the cost per unit, enabling them to set competitive prices, highlight the true value of their products, and make data-driven decisions.

5. Ease of Actionability

The most valuable insights are ineffective if they cannot be easily accessed and acted upon. Imagine a solution that not only provides industry insights but also customizes alerts and dashboards to show exactly how your prices compare to competitors in your specific categories and product groupings. An ideal solution would offer all this in one centralized platform, giving retailers easy access to data through intuitive dashboards, seamless data export options, and flexible API integrations. This enables a smooth, effortless process for adopting and utilizing the platform.

Ease of use and actionable insights should be at the core of such a solution. A SaaS-based web portal can provide businesses with access to insights through user-friendly dashboards, detailed reports, and impactful visualizations. Customized insights tailored for each persona within the organization facilitate swift actions on relevant competitive intelligence. Whether it’s day-to-day tactical recommendations or inputs for long-term strategies, the platform should ensure that all insights are easily consumable and actionable.

Moreover, the data should be accessible using plug-and-play APIs, enabling businesses to integrate external data with their internal pricing or ERP systems and BI tools. This integration generates predictive intelligence, enhances decision-making, and drives more robust business outcomes.

Choosing the Right Pricing Intelligence Solution Will Determine Your Success

Retailers need to leave behind generic pricing intelligence tools. For true success, retailers need a solution built to tackle their specific challenges. With capabilities like comprehensive data collection capturing granular details across regions and languages, local insights into store-level data for informed decision-making, accurate price comparisons with unit normalization, and access to actionable insights, retailers gain a complete and holistic picture of the pricing landscape, setting them up for success. Additionally, AI-powered and human-aided product matching ensures accurate competitor analysis

These are just some of the essential capabilities DataWeave offers to retailers. By prioritizing these, retailers can transform their pricing strategy into a profit-generating machine, keeping them ahead of the curve and exceeding customer expectations in a competitive market to help them stay at the forefront of their categories.

To learn more, talk to us today!

June 11, 2024
6 Common Pricing Intelligence Challenges Retailers Face (And How to Overcome Them)
When your product pricing is sub-optimal, you leave money on the table. This is especially significant for eCommerce retailers who must contend with their consumers ‘shopping around’ for the best price before making a purchase. All eCommerce retailers experience some amount of cart abandonment. In fact, the average cart abandonment rate is estimated at 70.19%, and the reason is often that customers find a better price elsewhere, whether at other online stores or in traditional brick-and-mortar ones.

If you want to win the business of price-sensitive shoppers, you need a robust pricing strategy to keep up with changing competitor pricing. That’s one reason (among others) that retailers rely heavily on pricing intelligence solutions. With the right pricing intelligence solution, retailers can stay on top of market shifts, manage profit margins, maintain price perception, and of course, price their products competitively.

Unfortunately, adding a new pricing intelligence solution to a retailer’s tech stack is not without its challenges. But the good news is there are ways to overcome them.

In this post, we’ve rounded up six challenges most commonly cited by retailers and proposed strategies to overcome them. So if you’re considering a pricing intelligence solution that can get you closer to your business goals, read on to learn more.

1. Scalability Constraints

As access to the internet has expanded globally, the ratio of brick-and-mortar sales compared with eCommerce continues to narrow. A natural consequence of this is that more shoppers than ever before now browse and buy across diverse web environments, including mobile apps.

This means that retailers need to track pricing across not just websites and physical stores, but also across mobile apps — a sales channel that was largely sidelined before.

Modern pricing intelligence solutions need to consolidate data from:
- Online storefronts
- Mobile apps
… and also from delivery channels, which often have different assortments and pricing:
- Standard home delivery
- Expedited, same-day home delivery
- Buy online, pickup in-store (BOPIS)
- Subscription
- Curbside pickup
In this context, imagine having to track the pricing of millions of SKUs compared against dozens of competitors each day. When new channels and devices are added, many pricing intelligence solutions in the market are unable to handle such data complexity and scale. They’re not built to continually grow and expand to meet changing needs. Even worse, some retailers opt for homegrown DIY systems, which struggle to keep the datasets updated, accurate, and current—activities that require significant cost and human effort.

How DataWeave Bridges This Gap:

What you need is a platform that can track millions of SKUs across dozens of competitors and geographies. No matter where the data is coming from or how vast the demand for the product is, an ideal solution should be able to synthesize huge amounts of complex data and generate meaningful insights.

Your competitors are continually changing their eCommerce setup, whether through subtle changes to their product attribute listings or broader changes to domains or apps. With DataWeave’s pricing intelligence solution designed to scale up as required, you never need to worry about the backend flexing to accommodate changes.

2. Inability to Match Products Without Clear UPC/EAN Identifiers

Another problem with many pricing intelligence solutions is their inability to match products if a UPC/EAN identifier is missing. Often, a competitor will list an identical product on their storefront and omit any clear identifiers. On Amazon, an ASIN might be listed or you might be able to bring in a DPCI from Target.com. However, without clear identifiers across eCommerce platforms, retailers struggle to aggregate every instance of the products, and as a result, are unable to achieve accurate pricing comparisons. They often face this challenge when they work with commoditized web scraping service providers who have very limited expertise or experience in refining the data into meaningful insights.

How DataWeave Bridges This Gap:

If you can’t match UPC/EAN codes, you need a solution that leverages artificial intelligence to match products based on other variables, such as product titles, descriptions, and images. AI, in combination with human expertise, can take on the task at a speed and accuracy that would be unfeasible for humans alone.

Artificial Intelligence is constantly learning and improving. At DataWeave, we accelerate this process by introducing new scenarios and datasets for the product to continually learn from. At the outset, our AI product matching is roughly 80-90% accurate every time. To improve this number to over 95%, we introduce human validation and nuanced judgments. Over the years, this feedback loop has continued to refine its algorithms, resulting in near-perfect data accuracy for retailers.

Our solution uses AI built on more than ten years of data to perform robust product matching for retailers at a massive scale. Using a unified platform with text and image recognition, DataWeave matches products from among hundreds of eCommerce websites and across millions of products.

3. Poor and Inconsistent Data

Retailers often complain that the data within their pricing intelligence solution isn’t accurate, is inconsistent, and may even be comprised of statistical smoothing and gap-plugging smokescreens. The root of this problem often lies in the inability of these tools to consistently track prices across diverse web environments. Poorly designed web scraping infrastructure fail when eCommerce websites change their underlying configuration and structure (which happens periodically). As a result, they don’t have enough data to see the market as a whole, and end up viewing synthetic or small sample-set data.

How DataWeave Bridges This Gap:

At DataWeave, transparency drives our approach to delivering insights. We only present real-world data in our data feeds and dashboards to customers. This is possible only due to the supreme confidence we have in our ability to consistently capture and present accurate data. We achieve this by using a combination of AI and sophisticated web scraping infrastructure developed and enhanced over a decade.

In fact, we are the first in the industry to launch a Data Statistics Dashboard that helps our customers scrutinize match rates, track data freshness, highlight any gaps in the data, and manage product matches independently.

4. Limited Integration Options with Internal Systems

Too often, a retailer will select a pricing intelligence solution that promises exceptional insights but then fails to offer a manageable workflow for day-to-day use. This usually happens because it doesn’t integrate with the retailer’s existing tech stack.

Without a convenient process that connects internal systems, your pricing intelligence solution is just another piece of technology that your team does not use to its full potential. You may require your competitor pricing data to flow into price optimization tools, price management tools, BI tools, ERP systems, or revenue management systems. Without this capability, you’ll see limited ROI and underwhelming results because all the insights in the world are of little use if you can’t consume them easily and put them into action.

How DataWeave Bridges This Gap:

At DataWeave, we understand the importance of being able to integrate external data with your internal tech stack. Our data can be accessed and extracted using plug-and-play APIs, enabling businesses to combine their external and internal data to generate predictive intelligence.

We also have other data feeds ready to be integrated, including FTP and Amazon S3. Our integration experts can work with you to create custom integrations to existing internal pricing platforms. Our ultimate goal here is to seamlessly elevate your pricing intelligence strategy with minimal change management.

5. Limited Custom Analysis Capabilities

Every retailer is unique. There are various geographies, languages, markets, product categories, and pricing strategies that differentiate one retailer from the next. Many retailers find it challenging to derive actionable insights from their pricing intelligence solution because the analysis and customization capabilities are too limited.

For example, some retailers might want to evaluate their competitiveness after applying coupons and promos to selling prices. Others may want to perform a one-time pricing analysis of just list prices across competitors. Some may want to view insights that help them take tactical decisions day-to-day, while others would like a historical view across multiple dimensions to help make strategic long-term pricing decisions.

Without the ability to customize their views or the underlying data, retailers could feel restricted in their ability to drive meaningful impact with their pricing intelligence.

How DataWeave Bridges This Gap:

What you need are foundational dashboards, reports, and visualizations in a web portal that can be tailored to your business needs. Then, you need the expertise and guidance of a team of business analysts who can help you configure custom reports and dashboards.

At DataWeave, we offer bespoke insights for each persona, enabling swift actions on relevant competitive intelligence. These include day-to-day tactical recommendations or inputs for long-term strategies. And because all DataWeave customers get access to our team of expert analysts, it’s simple and straightforward to configure unique reports and dashboards to suit your business.

6. Sloppy Support

No solution, at least not one that undertakes complex work, works optimally with a ‘set it and forget it’ approach. From time-to-time, you need human intervention to ensure your pricing intelligence is working in the way that it needs to for you. Unfortunately, one of the most common challenges retailers face with their pricing intelligence tool is a lack of support.

Unavailable or patchy customer support is a significant challenge that can result in low confidence, delayed resolutions, and even abandoned pricing actions.

How DataWeave Bridges This Gap:

Dataweave’s global team of pricing experts are available around the clock for support and guidance. Not only do we have tech experts and business analysts that you can consult at any point, we also have an exceptional team of customer success professionals to help you overcome any technical and strategic issue you might face.

As one customer puts it, with DataWeave you gain access to: “Excellent customer service, super collaborative staff, user-friendly interface.”

Another verified user from the consumer goods industry had this to say:

“Great platform and customer service! Our client service team is very helpful and always responds to ad-hoc requests in a very timely matter!”

Read more reviews from real DataWeave users on G2: https://www.g2.com/products/dataweave/reviews

Finding The Right Pricing Intelligence Solution

As the competition heats up, retailers need to unlock every available opportunity to gain an edge and capture market share. At DataWeave, our AI-powered pricing intelligence software helps you uncover gaps quickly and build a pricing strategy that is as attractive as it is effective. Our ability to scale, match your products across the entire ecosystem with consistent accuracy, and slide right into your current operations to provide advanced analytics, makes us the preferred choice for many of the world’s leading retailers.

Want to start benefiting from actionable product matching and pricing intelligence? Request a demo today.
May 29, 2024
Easter Candy Pricing Trends 2024: Winning Strategies for Retailers and Brands Amid Cocoa Price Surge
Easter egg hunts just got more challenging for families this year as the price of chocolate and other candies has soared. The root of this price surge lies in a cocoa deficit, attributed to diseases affecting crops and the adverse effects of climate change on West African farms, which supplies over 70% of the world’s cocoa. This has resulted in a tripling of cocoa prices over the last year, causing a “cocoa crunch,” and severely impacted confectioners and chocolate makers.

Reuters recently reported that Iconic brands such as Hershey’s and Cadbury find themselves grappling with the need to adjust to escalating costs for raw materials. Given that Easter is one of the top three candy-purchasing occasions, these manufacturers are contemplating raising their prices to sustain their profit margins.

Despite the challenges posed by the cocoa shortfall and persistent inflation, the National Confectioners Association anticipates that Easter candy sales in the U.S. will match or even exceed last year’s figures, which amounted to approximately $5.4 billion. This expectation is predicated more on price increases than on a rise in sales volume.

At DataWeave, our ongoing analysis of pricing trends across various consumer categories among retailers has provided insight into the evolving landscape of chocolate and candy prices in 2023 and 2024.

Our Analysis of Inflation in Candy and Chocolate Prices

Our study encompassed a broad array of 3,300 products from leading U.S. retailers, Amazon, Target, Kroger, and Giant Eagle. As illustrated in the following chart, the trajectory of prices over the past 15 months was compared against the average prices in January 2023. Our tracking focused on two key price points: the selling price, which represents the final cost to consumers after applying any discounts or promotions, and the Manufacturer’s Suggested Retail Price (MSRP), as determined by the brands themselves.

The findings from our analysis indicate that the average selling price, primarily influenced by retailer decisions, has experienced a steady increase throughout 2023, reaching a peak at 16.2% above January 2023’s figures by December. As of March 2024, coinciding with the Easter season, the selling prices are approximately 10% higher than they were at the beginning of the previous year.

Simultaneously, the MSRP has seen a consistent uptick, driven by the climbing costs of cocoa. Brands have adjusted their suggested prices accordingly, with the current MSRP standing about 7% above its January 2023 level, after having peaked at a 7.6% increase by December 2023. This reflects the direct impact of rising cocoa costs on product pricing strategies.

Chocolate Candies Are Hit The Hardest

Across all candies, chocolate-based products have witnessed significantly sharper price increases than their non-chocolate counterparts. In the past 14 months, the selling prices of chocolate items have surged by 14.9%, a stark contrast to the modest 4% rise observed in non-chocolate candies.

This price escalation was particularly pronounced during the Christmas shopping period, a response to heightened demand, before experiencing a temporary decline in February.

The diminishing availability of cocoa, coupled with rising costs for packaging and transportation, has compelled brands and retailers alike to transfer these added expenses onto the consumer. This dynamic underpins the distinct pricing trends observed across the candy spectrum, with chocolate items bearing the brunt of these cost pressures.

Discounts Offered By Retailers and Brands to Entice Easter Shoppers

In our analysis, we delved deeper to identify the retailers and brands offering the most compelling prices for Easter-centric confections, including Chocolate Eggs, Chocolate Bunnies, and Easter-themed gift packs.

Kroger emerged as the frontrunner among the retailers we monitored, offering an impressive 19% discount on Easter candies. Giant Eagle followed with a solid 14% average markdown. Meanwhile, Amazon and Target provided more modest promotional discounts at 12% and 10%, respectively.

Kroger is making significant efforts to ensure consumers have access to attractively priced Easter treats. The retailer planned to keep its doors open throughout the Easter weekend, featuring baskets brimming with discounted items such as Russell Stover chocolate bunnies, Brach’s jelly beans, Reese’s eggs, and assorted bags of popular candies from Snickers, Twix, and Starburst, among others. Additionally, Kroger is enhancing its value proposition through gift card offers and exclusive Easter deals for its loyalty program members.

On the brand front, Starburst by Mars Wrigley leads with the steepest discount of 25%. Cadbury, under Mondelez, is not far behind, offering 21% off its mini eggs and other Easter treats, marking an increase from last year’s 17% discount. Ferrero Rocher is making a strong pricing move with an average 20% markdown on its Easter selections, including the chocolate bunny and squirrel figures.

The beloved Peeps marshmallow candies by Just Born are being offered at an 18% discount this year, slightly less than the 23% discount seen in 2023, likely reflecting the impact of rising sugar costs, given their sugar and corn composition.

Other notable brands, including M&M’s and the premium Swiss chocolatier Lindt, have elevated their average Easter discounts to 17% this year, up from the previous year’s discounts of 12%, and 10% respectively, showcasing a competitive pricing strategy to delight consumers this Easter season.

Coping With Inflation This Easter Season

Retailers and brands aiming to remain profitable and competitive in the current challenging environment can adopt a few strategic approaches:
- Creative Product Bundling: Design innovative combo packs that mix chocolate and non-chocolate items. Such bundles can cater to diverse consumer preferences and budget ranges while preserving profit margins.
- Encouragement of Bulk Purchases: Offer enticing discounts on larger quantities to promote bulk buying. This strategy can help amplify sales volumes, compensating for increased costs per item and fostering economies of scale.
- Strategic Competitive Pricing: Keeping a vigilant eye on competitors’ pricing strategies is vital. Aim to capture market share through well-thought-out discount strategies that balance competitiveness with margin preservation. Leveraging advanced pricing intelligence, such as that offered by DataWeave, can provide invaluable insights for making informed pricing decisions.
- Product Size Adjustments: Consider revising the size or weight of products as a cost management measure, a strategy known as “shrinkflation.” It’s crucial to approach this transparently, ensuring clear communication on packaging to uphold consumer trust.
Adopting these strategies—focusing on bundle offerings, incentivizing bulk purchases, optimizing pricing strategies based on competitive intelligence, and thoughtfully adjusting product sizes—will be pivotal for confectioners to navigate the challenges posed by the cocoa price surge.

For more information, reach out to us to speak to a DataWeave expert today!
April 1, 2024
Which Amazon Sale Offered Better Deals: Prime Day in July or Big Deal Days in October?
Amazon reported a record-breaking Prime Day this July, marking it as the biggest sales event in the company’s history. So when the eCommerce giant announced the Prime Big Deal Days this fall, we were curious to find out how big a deal it really is.

The Prime Big Deal Days, similar in magnitude to the Summer Prime Day, promised to present substantial savings across a diverse range of categories, including electronics, toys, home, fashion, beauty, and Amazon products.

However, for a shopper, an important question is: Does the Prime Big Deal Days in October offer lower prices than Amazon’s mega Prime Day event in July?

To answer this question, we turned our data aggregation and analysis platform to focus on these two sale events and analyzed which event offered better deals across key categories and brands.

TL;DR: Surprisingly, the Prime Big Deal Days in October offered, on average, 2.02% higher discounts than its counterpart event in July.

Read on for details on how we went about our analysis and how discounts vary across categories, sub-categories, and brands.

Our Methodology

We tracked the prices and discounts of a large sample of products during both Prime Day events. The following are some relevant details about our sample:
- Number of products analyzed: 1500+
- Categories: Apparel, Consumer Electronics, Home & Furniture, Health & Beauty
- Prime Day Sale Analysis: 11-12 July 2023
- Prime Big Deal Days Analysis: 10-11 Oct 2023
- Website: Amazon.com
Our analysis focused on the differences in the prices and discount levels of products between the two sale events.

Our Key Findings

The average discount during the Prime Big Deal Days in October was 29.44%, which was 2.02% higher than the average discount during the Prime Day sale in July (27.42%). Interestingly, the October event offered better deals across each product category analyzed, albeit at slightly varying levels.

By offering deeper discounts in October, Amazon may have aimed to encourage early holiday shopping, thereby capturing a larger share of the consumer wallet before competitors intensify their promotional activities closer to the festive season.

As other retailers and online marketplaces gear up for their own holiday promotional events, Amazon’s decision to provide heightened discounts in October could serve as a preemptive move to secure customer loyalty and drive sales momentum before the onset of the peak shopping period.

Additionally, Amazon’s strategic push to amplify the visibility of its diverse product offerings, including exclusive launches and partnerships during the October event might have contributed to the higher discounts.

Next, let’s take a closer look at each product category.

Apparel

During October’s Prime Big Deal Days, the Apparel category experienced a notable uptick, boasting a 2.29% increase in discounts compared to the earlier Prime Day event in July.

In the detailed assessment of Apparel sub-categories, Men’s and Women’s Swimwear, alongside Men’s Shoes, Innerwear, and Athleisure, emerged as the segments showcasing the most substantial average discounts during October. Fall also brought about more affordable prices for Women’s Innerwear and Men’s Shirts. However, Women’s Athleisure, Dresses, and Tops displayed diminished average discounts during this Prime Big Deal Days event.

Delving into brand-specific analyses revealed intriguing trends. Athleisure brands such as Ibkul, Esprlia, and Ryka notably escalated their discounts in October after minimal markdowns during the Summer Prime Day sale.

Steve Madden, witnessing heightened discounts in October, hinted at a growing demand for boots and footwear in the Autumn and Winter seasons. For instance, the Steve Madden Men’s Fenta Fashion Sneaker was priced at $46 during the Summer Prime Day, and only at $35 during the Prime Big Deal Days in October.

Conversely, brands like PGA Tour, Land’s End, Roxy, and Anrabess offered more substantial discounts during the Summer compared to the October event.

Consumer Electronics

The Consumer Electronics segment during October’s Prime Big Deal Days showcased an average price decrease of 1.98% compared to the Prime Day event in July.

Nearly all scrutinized subcategories experienced heightened discounts during the Fall Prime Big Deal Days in October. Tablets, Speakers, Drones, and Smartwatches notably presented higher discounts of 4.06%, 3.51%, 2.99%, and 2.69%, respectively, in October. However, more enticing deals were found on Earbuds and TVs during July’s event.

Examining consumer electronics brands, Google stood out by offering the most compelling deals in October, boasting an average discount of 23.35%, marking an 8.94% increase from the Summer Prime Days’ 14.41%. Psier, Sony, and OnePlus also featured significantly reduced prices during the Fall. For example, the OnePlus 10 Pro | 8GB+128GB was $500 during the sale in July and only $440 during the Prime Big Deal Days in October.

Conversely, prominent brands such as Bose, Sennheiser, Samsung, LG, and Asus opted to offer heavier discounts in July. Notably, the Samsung All-in-One Soundbar w/Dolby 5.1 was priced at $218 in October but only $168 in July.

Home & Furniture

During October’s Prime Big Deal Days, the Home & Furniture category experienced a notable 1.59% increase in average discounts compared to the Prime Day event held in July.

Notably, Entertainment Units, Rugs, and Coffee Tables emerged as standout sub-categories that were more attractively priced in October, exhibiting price differences of 7.73%, 5.33%, and 4.80%, respectively.

Interestingly, among the scrutinized sub-categories, only Luggage showed a lower price during the Prime Day sale in July compared to the October event. This shift likely reflects evolving consumer demand as the holiday season approaches, with items like rugs and entertainment units becoming increasingly sought-after categories for purchase.

If you’re keen to explore how these trends vary across brands within this category, reach out to us for more insights.

Health & Beauty

During October’s Prime Big Deal Days, the Health & Beauty category showcased products at an average of 1.99% lower prices compared to the Prime Day event held in July.

Our analysis of Health & Beauty reveals that a majority of the subcategories presented higher discounts during the October Big Deal Days event. Essential items such as Toothpaste, Sunscreen, and Electric Toothbrushes notably stood out as significantly more affordable during the Fall event, reflecting not only consistent demand but also a seasonal emphasis on these products. For instance, the Oral B iO Series 3 Limited Edition Electric Toothbrush, priced at $140 during the summer Prime Days, was further discounted to $120 in the fall event.

Interestingly, Beard Care emerged as an exception, displaying higher discounts during the Prime Day sale in Summer compared to Fall’s Prime Big Deal Days.

Examining brands within the category, Babyganics, Thinkbaby, and Vaseline showcased substantial increases in average additional discounts during October’s Prime Big Deal Days.

Conversely, prominent brands like Maybelline, Neutrogena, and Cetaphil offered lower discounts during the fall event.

Competitive Insights to Drive Optimized Sale Event Pricing

At DataWeave, we understand the pivotal role of competitive pricing insights in empowering retailers and brands to gain a competitive edge, especially during significant events like Prime Day. Our commitment lies in providing retailers with precise and extensive competitor price tracking on a large scale. This empowers them to devise impactful pricing strategies and consistently uphold a competitive stance in the market. To learn more about how this can be done, talk to us today!
November 20, 2023
Navigating the Turbulent Home and Furniture eCommerce Market in 2023 with the Power of Competitive Intelligence
The home and furniture retail industry is going through a turbulent time. As inflation reared its head mid-2022, leading retailers in the category have been grappling with the higher costs associated with producing and distributing their products, as well as reduced shopper demand. The rising costs of raw materials, transportation, and labor have had a direct impact on the pricing dynamics within the industry. For example, reports indicate container rates soared to nearly 10 times pre-pandemic levels towards the end of 2021.

Furthermore, shoppers’ spending power has been constrained, while higher interest rates have suppressed demand. Retailers have had to adapt their assortment and pricing strategies to cater to a wider range of shopper preferences driven by changing lifestyles and a growing emphasis on sustainability. Post-pandemic, demand has been primarily driven by affluent shoppers.

Towards the end of 2021, due to supply delays and disruptions, retailers heavily stocked up on available products. However, when demand subsequently decreased in 2022, they were left with a significant amount of unsold stock that was purchased at high rates. This put them in a difficult situation, as they had an excess of products but were unable to sell them even at reduced prices without impacting their profit margins. Additionally, staying competitive in a rapidly changing market environment was equally important.

Given this context, it is crucial for home and furniture retailers to adopt a data-driven approach that utilizes competitive and market insights to consistently maintain or increase their online sell-through rates. DataWeave’s Commerce Intelligence solution offers exactly that, empowering retailers across various industry segments to stay updated on evolving consumer trends and competitor actions.

To gain a better understanding of the pricing strategies employed by leading home and furniture retailers throughout the past year, we leveraged our proprietary data aggregation and analysis platform to track and analyze the pricing of a wide range of products across multiple retailers and subcategories within the industry.

Our Research Methodology
- Number of SKUs: 400,000+
- Key retailers tracked: Amazon, Wayfair, Home Depot, Overstock, Target, Walmart
- Key categories reported: Home and Office, Bed and Bath, Bathroom, Bedroom, Decorative, Dining Room, Kitchen, Garden & Patio, Hardware
- Timeline of analysis: April 2022 to April 2023
Our Findings

Interestingly, our analysis indicates that average prices in the home and furniture category rose by around 5% between March 2022 and April 2023. However, there have been seasonal fluctuations in the prices over the course of the year.

Among the various subcategories, the most substantial price surge was observed in home office equipment, with an uptick of 9.3% in January 2023 when compared to March 2022. The surge in demand for home office furniture, fueled by the widespread adoption of work from home arrangements, played a pivotal role in depleting inventories and consequently driving up prices. Additionally, the shift towards collaborative workspaces and the gradual expansion of office environments have contributed to the sustained demand for office furniture.

Avg. price changes MoM across home and furniture subcategories from April 2022-23.

While prices for several subcategories rose significantly, others experienced subdued growth, such as bed and bath. The subcategory experienced the lowest price increment, registering a modest 2.8% increase annually. This can be attributed to the impact of a subdued housing market and a decrease in first-time buyers, which may partly be due to the global recession and inflationary pressures.

Moreover, retailers overestimated the demand for home furniture during the holiday season, leading to an overstocking of inventory. Consequently, prices experienced a dip from October to December 2022. In fact, this was a common trend across all home and furniture subcategories. As retailers emerged from the holiday season, prices rose to their highest level in January 2023, and have stayed relatively stable since.

Some of these trends vary among retailers as each faces different challenges and responds in distinct ways.

Wayfair, for example, shows a significant dip in pricing after October 2022, with prices stabilizing in 2023. This could be in response to the retailer’s shrinking consumer count, losing 5 million of its 1.3 billion consumers in 2022 due to declining demand.

Avg. price change MoM within the home and furniture sector across retailers from April 2022-23.

In fact, online furniture retailers like Wayfair and Overstock reported declines in annual revenue in 2022, as the furniture sector continued to normalize from the high spending seen during COVID-era lockdowns. Wayfair reported that its 2022 net revenue was $12.2 billion, down almost 11% from the year prior. The company also laid off 10% of its workforce in August 2022. Overstock’s reported annual net revenue in 2022 was $1.9 billion, a 30% decrease year-over-year.

Interestingly, both companies took contrasting approaches in response to this situation. Wayfair opted for aggressive cost-cutting measures, including layoffs and a reduced marketing budget. On the other hand, Overstock focused on attracting new customers through influencer marketing and improving their app, aiming to expand their customer base. With a strategy geared towards younger buyers, Overstock allocated a larger marketing budget than ever before. Our data supports the fact that Overstock did not rely on price reductions to entice shoppers.

Target has consistently maintained lower price increases compared to Walmart, defying the common perception of Walmart being more conservative in its pricing. Notably, Amazon also stood out minimal price increases throughout the year, being surpassed only by Wayfair since November 2022.

As price sensitive shoppers increasingly compare prices before making a purchase decision, retailers need to ensure they are priced competitively in the market on a consistent basis to liquidate stock and gain market share without compromising significantly on margins.

A Sophisticated and Versatile Product Matching Solution is Essential to Achieving Price Leadership

Product matching plays a vital role in monitoring competitive prices and analyzing price leadership. Within the home and furniture category, there is often a multitude of representations for the same product across various online platforms. Furthermore, eCommerce websites offer a wide array of options, including variations in size, color, material, and similar products. Without an accurate and comprehensive method of matching these products, it becomes impossible to track and compare prices effectively, especially on a large scale. Thus, a versatile product matching engine tailored to the unique requirements of the home and furniture sector becomes essential.

DataWeave offers an industry-leading product matching platform that harnesses advanced AI models specifically trained to identify and leverage multiple product attributes extracted from titles, descriptions, and images to accurately match products across websites. Additionally, our platform intelligently matches similar products based on a diverse range of extracted attributes. This empowers our retail partners to gain competitive pricing intelligence not only on exact product matches but also on similar and substitute products, as well as their respective variants.

With our competitive pricing intelligence solution, retailers in the home and furniture industry can confidently analyze and track prices, ensuring they stay at the forefront of price leadership in their market.

To learn more, reach out to us today!
June 29, 2023
6 Smart Pricing Strategies for eCommerce Success

Over the last decade, the proliferation of e-commerce and the consequent surge in competitiveness among retailers has brought focus to one of the most critical drivers of success in online retail: pricing. According to McKinsey, an average 1% increase in price can translate into an 8.7% increase in operating profits (with the assumption that there’s no loss of volume). Yet, the company estimates that up to 30% of pricing decisions fail to provide the best price – every year. That’s a potential impact of millions in lost revenue for most modern-day retailers, a fact only made worse by the irony that in today’s times of automation and big data, there’s no shortage of intelligence to facilitate the best decision-making.

What you need is the ability to gather and rationalize all the data out there – of competitor prices, price perceptions, market dynamics, buyer behavior, etc. – in good time to price your products just right for maximum margin and revenue. The best part? Effective product pricing contributes significantly toward fostering a great customer experience, too.

Once you have your intel in place, there are plenty of eCommerce pricing strategies to choose from – it’s only a matter of identifying the metrics that matter the most to your business goals. That said, there are several models that have gained widespread popularity and acceptance over the years, like the following six:

1) Introductory pricing

This is a common marketing strategy used in the e-commerce space, where you draw consumer focus to a newly launched product or service, or the fact that you’re a new entrant in a market. There are two ways to do this – one is to start with steep discounts (particularly during sale events, and often in partnership with the consumer brand) with the aim of winning over more market share. At the other end is the strategy of setting relatively high initial prices. This works best for “exclusive offer” or “limited edition” opportunities; for instance, the opportunity to be the first to own the latest iPhone model.

2) Cost-linked pricing

In this method, you calculate how much it costs to sell a product and add a pre-determined margin to the final cost. In the world of online retail, product cost amounts to a lot more than the mere sum of manufacturing costs. For instance, it includes the procurement, labor, software, sales and marketing, shipping, and overhead costs that contribute to the total cost of housing it as long as it’s unsold. Therefore, all these costs need to be factored when determining the final product price. While the advantages of this model are its simplicity and the promise of guaranteed returns for each product sold, the flip side is that it doesn’t factor in the competitive landscape. The trick, therefore, lies in finding the balance between higher margin and sell-through rates, particularly given the aggressively competitive nature of online retail.

3) Competitive pricing

Today’s digitally savvy customers are forever comparing prices across several websites in the quest for the lowest prices. In fact, price is among the most critical factors that influences purchase decisions across products as well as categories. The competitive eCommerce pricing strategy, therefore, determines product price based on how the same products are priced by various competitors. While this model allows you to modify prices as frequently as necessary to drive efficient pricing and maximize revenue and margin, the complexity lies in ensuring consistent access to competitor prices, particularly in today’s highly dynamic e-commerce environment. DataWeave’s Pricing Intelligence platform helps eCommerce businesses overcome this challenge by helping them identify price improvement opportunities based on timely competitive intelligence at a massive scale.

4) Dynamic pricing

This model takes into account competitor prices, demand, and inventory levels, which are set up as triggers for automated pricing rules. While this results in sustained competitiveness, it requires a price optimization model that determines the optimal price in real-time response to fluctuations in demand and competitive prices – all the time ensuring alignment with your business goals. In other words, this model allows you to ensure consistently competitive yet optimized prices, thus acquiring and retaining a competitive edge in the market.

5) Price perception management

The company most famous for following this strategy is Amazon. The retail giant frequently identifies its most popular products and offers its largest discounts on them, often undercutting competitors. In other words, in this model, you “invest” in customer acquisition through excessively aggressive discounts on a select group of products – following which, you can cross-sell or up-sell other higher-priced products. Thus, you boost your perceived value to customers. Another way to drive a positive perception is to display discounted products at higher ranks on featured listings. For instance, in a recent study that we conducted, we found that 9 out of 10 leading US retailers’ top 50 ranked products (in each category) were significantly cheaper than the rest of their products.

6) Bundle pricing

The principle for this model is simple. You sell a number of the same products (or a range of complementary ones) for a combined, economical price. This is different from customers adding products individually to their cart as it works on the consumer psyche, which is more likely to favor a purchase that offers considerable perceived value. Thus, not only are you offering enhanced value to your customers (and in turn improving overall customer experience), you’re also actually increasing sales. Bundle pricing works best for products that are likely to involve repeat purchases (such as batteries, cereal boxes, or socks), and also for those that may need accessories (for instance, a food processor with various attachments). However, for bundle pricing to be effective, it’s also important to understand how your competitors are bundling their products.

Granted, it isn’t easy to identify the perfect pricing strategy for you. As customers increasingly engage with you at every stage of their decision-making process and market dynamics become exceedingly complex, pricing as a function has to keep pace. As a retailer, your objective is to unearth the actionable insights hidden in your big data and leverage the resulting opportunities to drive the maximum possible revenue and margin – without getting lost in the flood.

May 24, 2019