Price management and marketplaces
In the fast-moving world of online commerce, price management on marketplaces is becoming the epicenter of success. Every click, every transaction, represents a unique opportunity to maximize revenues. This article delves into the intricacies of this crucial strategy. From setting competitive prices to navigating the complex landscape of sales platforms, discover how to fine-tune your approach to boost visibility, conversion, and above all, profits.
Positioning yourself on marketplaces is a real challenge for retailers. Faced with the power of the e-commerce giants, the crucial question emerging is: are marketplaces a threat to be feared or an opportunity to be seized?
Marketplaces: from challenge to opportunity
In the retail arena, marketplaces may seem daunting for retailers, but behind this challenge lies a real opportunity for growth. Although selling on these platforms may initially seem limited, the future lies in strategic diversification.
For retailers, the key lies in adopting a robust price monitoring solution., this will enable us to industrialize our pricing strategies. However, resilience goes beyond this: retailers should exploit assets such as omnichannelity, B2B services, the diversity of the product universe, and even consider creating their own marketplace.
Beyond simple resistance, adaptation is crucial. Retailers need to go beyond simply tracking competitor prices by investing in advanced price intelligence solutions. By industrializing price management, retailers are in a position to maximize their competitiveness while preserving their margins.
However, the battle isn’t just being waged on the pricing front. Retailers can capitalize on other strategic strengths, such as expanding the omnichannel experience, optimizing BtoB services, highlighting their distinctive product universe and even developing their own marketplace. This strategic versatility is the key to thriving in the complex ecosystem of marketplaces.
A real opportunity for brands
Marketplaces are proving to be an exceptional distribution channel for brands. In France, 84% of Internet users have made purchases online. Considered as traditional retailers, marketplaces offer diverse opportunities, but it is essential to navigate these collaborations with discernment.
A proactive approach involves understanding which of the brand’s products are already present on the marketplace via third-party retailers, enabling distribution to be optimized. When you set up your own store on the marketplace, you’ll be able to manage prices directly, and limit the disruption caused by small players destocking, thus preserving the product’s price image.
A strategic approach that goes beyond defense, offering brands a path to greater visibility and optimal management of their pricing reputation.
An intense competitive landscape!
In the meteoric rise of e-commerce, oligopoly is the unquestioned norm. This dynamic is clearly reflected in the impressive rise of marketplaces. These platforms, which have become an essential part of the e-commerce landscape, play a central role in the distribution and sale of products.. With giants like Amazon leading the way, attracting millions of visitors every month, competition between e-commerce players is intensifying around these marketplaces.
Marketplaces present both a threat and an opportunity, depending on the point of view of the players involved. For retailers, these platforms represent formidable competition. For brands, on the other hand, they offer an exceptional distribution channel. So, whether you’re looking to resist as a retailer or seize an opportunity as a brand, pricing strategy on marketplaces is becoming crucial.
In this competitive landscape, Optimix’s pricing solution stands out for its innovative approach. As a partner, Optimix offers tariff monitoring solutions enabling e-commerce players to implement dynamic, responsive pricing strategies, in line with those of their digital or physical competitors. Using these tools, retailers can industrialize their approach and stay competitive on these marketplaces.
For brands, Optimix offers increased visibility for the distribution of their products.This enables us to detect distributors and monitor prices. Whether on the defensive to clean up existing distribution or on the offensive to conquer new territories on marketplaces, Optimix offers solutions adapted to maximize brand presence and performance.
At the heart of pricing strategy on marketplaces lies the battle for the BuyBox. This buying box, often ignored by consumers, is an essential element in winning sales. Optimix intervenes here by proposing a winning strategy, using artificial intelligence to adjust prices. This not only enables us to outperform the competition, but also to maximize sales while preserving the price image of our products.
When you have your store on marketplaces, there are 2 possible scenarios:
The BuyBox battle
The battle of the BuyBoxTo win the maximum number of sales, it’s important to stand out from the crowd as a retailer. It is therefore necessary to obtain the “Buy Box”which owns the BuyBox therefore benefits from greater visibility, and it’s his or her product that will be put directly into the shopping cart. Injecting AI into the pricing engine will enable bullish strategies to be implemented in the face of competing pricing strategies. Indeed, the strategies most frequently encountered are simple price alignment strategies. The main problem with a alignment strategy is that it will only react to the market and competitors’ price movements. A well-educated AI will be able to proactively change its prices in order to “tie down” its competitors to its own price and become a “price maker” in the market. It will thus be able to directly and strongly influence competitors’ prices.
Price elasticity and pricing power
In another possible configuration, we find ourselves in a monopoly situation on the marketplace, where the retailer is the only one to offer the product. This means that every time, the retailer gets the Buy Box, ensuring sales of this product on the platform.
However, the challenge here is to maximize the number of sales while maintaining competitive prices. Pricing then becomes an essential lever in this equation. It’s all about finding the perfect balance between maximizing sales and setting prices that reflect the value of the product on the marketplace.
A key strategy in this situation is to determine the optimal price. based on past transactions and test it. The optimum price point can be identified by testing representative periods. The regression will plot the complete curve, helping to identify the estimated optimum price. However, it is crucial to note that this approach by demand elasticity may differ in the specific context of marketplaces, where competition and price dynamics may vary.
Another effective strategy is to determine a “willingness-to-pay” by taking into account the prices charged by competitors, and putting your pricing power to the test. By analyzing the price rankings of similar products from competing brands, we can define the maximum price acceptable to the market for each product. This approach makes it possible to test whether a higher price can be perceived by customers as being linked to superior quality, thus reinforcing the product’s premium positioning.
Artificial intelligence enables the proactive implementation of pricing strategies, going beyond simple adjustments to market movements. Optimix makes it possible to become a “price maker” on the marketplace, directly influencing competitors’ prices.
Marketplaces represent an essential opportunity to understand and improve price positioning, while boosting sales volumes and testing ambitious positions. However, it’s crucial to approach this environment with care and the right tools.
By opting for an offensive approach, brands can distribute their products directly on marketplaces, managing their prices directly and minimizing potential disruption.
Navigating the complex ecosystem of marketplaces requires a rigorous pricing strategy for brands and retailers keen to remain competitive. Price optimization has become a key imperative in this dynamic landscape.
To stay ahead of the competition, adopting a sophisticated pricing solution becomes an essential strategic asset. These tools enable agile adaptation to market fluctuations, maximization of margins and responsiveness to competition.
So, to thrive in this competitive environment, savvy retailers need to embrace the benefits of a pricing solution, forging a path to sustainable growth and pricing excellence.