Have smart pricing, watch the market dynamics!

Market dynamics are the set of factors that influence pricing, consumer behavior, and producer behavior. It has a huge impact on prices because it affects both the supply and demand side of the economy.

There are several methods to find the optimal price. It is worth considering the following:

Customer value, the value perceived by the customer, i.e. whether consumers perceive the price of a product or service as expensive, average, or cheap. Since the dynamics of e-commerce are changing rapidly, this means that customer habits are also changing.

Competitors' pricing is also a very important factor. Are you aware of how your competitors are pricing? To understand their strategy, you need to monitor their prices consistently. If you price without knowing your competitors' prices, you are leaving money in the market!

These two factors are therefore extremely important in determining the optimal price.

Now let's look at the market dynamics you need to know and adapt to in order to price effectively.

MAP YOUR CUSTOMERS' BUYING HABITS!

Customers influence the market. If demand is low, you won't be able to sell your products, right? In order to sell more products, you need to define your target audience accurately, and then you need to know the buying habits of your target audience.

What time of day do they shop on your webshop? Or do they just browse your products without buying? What do they buy? Track their movements and see if there is a change in their habits from time to time.

With online shopping growing by the day, customers are looking for the best possible shopping experience. So it's worth paying particular attention to making the shopping process as easy and enjoyable as possible for your visitors.

Personalized pricing strategy

Customers are willing to pay more for what they really value. The secret is to find out which customers really value your products and services. That's where a personalized pricing strategy works: find the optimum point where your customers are happy to pay and you make a profit.

For a personalized pricing strategy, it's recommended that you take a detailed look at your customers, and everything you know about their needs, problems, and behavior. You can then use this information to offer a price that you think will result in a sale.

Remember: effective personalized pricing offers loyal customers better deals than customers who have never shopped with you.

KEEP TRACK OF YOUR COMPETITORS!

By monitoring your competitors, and understanding the strategy behind their pricing, you can gain a competitive advantage.

You can monitor your competitors' prices in two ways. Manually or using software.

A major disadvantage of manual price monitoring is that it takes up a lot of time for you and your colleagues. Just to give you a simple example: suppose you sell 50 products on your website and you have 10 potential competitors. Imagine that you go to one of their websites, spend 30 seconds on each of the 50 products to copy the price, and record it in your spreadsheet. That's 1500 seconds or 25 minutes for 1 competitor. Multiply that by ten and you get 250 minutes a day, or over 4 hours…

With pricing software like PriceKit, you can save a lot of time and make your pricing much faster and more efficient, as price and stock tracking are done automatically! As well as saving time, you can also be sure that you're getting up-to-date and current data, which is crucial when it comes to pricing.

KEY PERIODS

Black Friday, holidays (especially Christmas), seasons, clearance, and in- and out-of-season: these are periods when the supply structure changes dramatically, so it's worth paying special attention to them. To give a simple example: let's take the clothing category, the arrival of the spring season. The spring stocking up can lead to a significant surge in purchases, i.e. in demand, which obviously has a strong impact on market dynamics.

STRIVE FOR QUALITY!

The quality of your products and services is an important factor in market dynamics and it does matter a lot!

The reason is that you can lose a lot of customers because of poor quality products, i.e. your goods and services have a clear impact on brand image.

Create value, and serve your customers with quality. Find out what their main problems are and offer a really effective, well-functioning solution.

ADAPT TO THE CURRENT ECONOMIC SITUATION

Inflation affects everyone, from individuals to small and medium-sized businesses to large corporations. To deal with this situation effectively as a retailer, you need to adjust your prices to inflation.

Monitoring the market, strengthening your brand, transparent communication and the use of software to support pricing can be particularly useful.