Do you need to view data in a different way?
In our previous blogs, we highlighted the need for retailers to understand their competitors through price comparison solutions. This is a still an essential stepping-stone in understanding your competitive landscape.
However, many of the companies we talk to also use data from these systems in a deeper strategic way. Instead of using the data at a direct product or price comparison level, there is growing shift to incorporate the insight and data at a category level. This is turn allows companies to view a more holistic picture of pricing trends.
Using data for better insight
Retailers are using trending information and category information to avoid individual price comparisons. By using a holistic view of the category trends across all the competitors is allowing companies to adjust price strategies accordingly. This could entail adopting own-brand or white label goods as the category to compete in.
Using KVI’s in price comparisons
Nearly all businesses need some key metrics, whether you are in B2B or B2C business. Indeed there is a growing trend for retailers to identify Key Value Items (KVIs) or Key Value Categories (KVCs) as key to understanding their business success. These KVIs and KVCs are those items and categories that consumers tend to notice.
However, to understand these indicators accurately, retailers need a reliable information gathering solution. Reliance on experienced internal staff alone will probably not cut it. Collecting KVI and KVC information needs to be structured and system driven. Price comparison solutions, such as Insitetrack, are the only way to truly establish a fact-based approach.
Growth of the super KVI
In some cases, retailers may wish to introduce super KVIs where the retailer will track a competitive price to customers in all of their channels all of the time. These too need to be tracked in a systematic way through tools and processes. (We will be delving deeper into KVIs and KVC’s in later blogs).
Ranking and Indexing
Measuring yourself against a baseline is a common way to understand your relative market position. As an example, if all your prices equate to 100, then you can quickly understand where your competition lies relative to you. If competitor X is at 95 then they are cheaper. If competitor Y is at 105 then they are more expensive.
Price comparison tools can systematically track trends across months to show your relative index is performing. By taking a holistic view of your comparative position you can review pricing strategies and develop actions to enable you to be more competitive.
Do you rely on gut instinct?
Many businesses follow their gut instinct rather than relying on data. This gut instinct may be honed by the expertise of buyers, pricing departments, and managers. Instinct still needs a helping hand now and again, even if it is to confirm what the organisation knows already. In some cases, the gut instinct may not be correct.
In today’s hyper-competitive world staying in business relies on understanding the facts and calculating the odds of success. Being more agile and strategic doesn’t mean jumping straight into the unknown. Understanding data and combining that with the skills and intelligence (or gut feeling) of your organisation is a must.
While I don’t normally compare retail competition as a ‘battlefield’, there are definitely some comparisons. Maybe we should learn the lessons from the famous Chinese general Sun Tzu’s, thesis on the Art of War and apply it business.
“The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat: how much more no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose” – Sun Tzu
Maybe taking a step back and looking at your strategic indicators may help you win.