1. Customers making buying decisions on price
Research has shown time and time again that customers are making buying decisions based on price. This simply means that if you set out wrong pricing structures, you risk going out of business. Competitor monitoring helps you figure out what prices are best for your target consumers and the kind of price shifts that can really affect your profit margins.
2. Set optimal price points
By monitoring your competitors pricing dynamics, you will be in a better position to set optimal price points. You just have to analyze the progress and development of prices over a certain period of time and then determine what has worked for your competition before. You can implement similar pricing strategies and tactics and see if they also work well for your retail business or not.
3. Remain on top of the game
Your retail business will only remain profitable if you are always on your toes when it comes to pricing. Competitor price analysis allows you to track and respond to price changes right away. There is no chance of remaining behind when other businesses are reaping profits after implementing a certain price strategy that is working well for the market at a particular time. Why should you be left behind when everyone else is making good profits? You will only take note of these price shifts through competitor price tracking.
4. Gain a competitive advantage
This is probably the biggest reason why people have invested in price monitoring. Remember that only a few retailers can be tracking you daily. If you keep track on a more regular basis, you will be in a better position to act and react quickly and stay ahead of the game. You won’t be one of those retailers who make changes when everyone else has already done so. Competitor price monitoring can give you the visibility most retailers just don’t have.
5. Develop a better pricing strategy
Another major advantage of competitor price analysis is that it helps you, as the retailer, to develop a better pricing strategy. Since it becomes easy to monitor exactly how your competition is doing on a regular basis, you are in a better position to develop a strategy that works best for your business. You can even monitor this pricing strategy after some time and see if it is paying off. Price monitoring basically gives you an idea of what works for your business and helps you generate the highest profits.