Your Pricing Checklist | eCommerce Matters Ep. 030

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In this, the last episode in the first Series of eCommerce Matters, Philip and Rob discuss how and why maintaining your position in the market gives you a tactical and strategic edge. Not just that, but giving you a breakdown of your 'Pricing Checklist' to help you structure your pricing check-ins.

Hosts: Philip Huthwaite (CEO & Founder of BlackCurve) and Rob Horton (Product Director at BlackCurve).

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Full Episode

Key Highlight

Rob bestows some best-practice pricing wisdom: How and why you should make time for routine checks to maintain your market position, and how many online retailers already use BlackCurve software to achieve this.

Podcast Summary

Establishing Business Objectives and Collecting Market Data

At the beginning of their discussion, Philip Huthwaite and Rob Horton underlined the critical role of defining clear business objectives. Whether it's maximising revenue, boosting market share, or maintaining a specific competitive position, these goals will steer the course of an eCommerce business's pricing strategy. Once objectives are set, businesses can begin to gather relevant market data. They should not only look inwardly at their own pricing history but also survey the market landscape by collecting data on competitors and customer behavior.

Learning from Competitor Data

Competitor data offers invaluable insights that can shape and inform a business's pricing strategy. This data may provide information about pricing trends, changes in market demands, or reveal strategic moves by competitors. The speakers advised businesses to stay adaptive and responsive to this information, learning from what works and what doesn't in the competitive landscape. However, Philip Huthwaite noted that there's a 'glass ceiling' to the value derived from competitor data. Past a certain point, additional data points will be required to optimise pricing further.

Innovative Strategies: Monitoring Stock Levels

To surpass this glass ceiling, businesses are encouraged to innovate and venture into new dimensions of pricing strategy. An interesting approach discussed by Philip Huthwaite involves monitoring stock levels. By keeping track of both their own and potentially their competitors' stock, businesses can dynamically adjust their prices based on supply chain factors. If a business realises that there's a supply chain constraint and they have significant stock while competitors don't, they might have an opportunity to raise prices and increase profit margins.

Recognising Market-Specific Dynamics

The effectiveness of these strategies, Rob Horton noted, can vary considerably depending on the specific characteristics of the market. Some markets, like the sporting goods industry with its high venture backing and private equity activity, require businesses to continuously innovate and advance their strategies to gain and maintain a competitive edge. In contrast, other markets may not demand such aggressive tactics. For these, understanding and reacting to competitor data might be enough to fulfill business objectives.

The complexity of Supply Structures and Live Pricing

Rob Horton also brought attention to the complex supply structures present in some markets, using tyre sales as an example. These markets often have intricate systems of rebates and other pricing dynamics that can significantly affect final prices. In such cases, businesses need to ensure their prices are updated in real-time as cost prices change, embracing a 'live pricing' approach.

Importance of Intraday Pricing and Automation

The speakers then moved on to discuss intraday pricing. In industries characterised by highly volatile supply chains, prices can fluctuate dramatically within short periods. This situation necessitates an hourly or even more frequent revision of pricing decisions. In this context, automation and efficient tooling aren't just helpful – they're essential to manage these rapid changes without creating an overwhelming workload for the team.

The Continuous Process of Testing and Learning

Philip Huthwaite and Rob Horton concluded their podcast by emphasising the constant cycle of testing and learning in pricing strategy. It's crucial for businesses to keep probing new questions, exploring fresh strategies, and refining their approaches based on their findings. This iterative process, they hope, will lead to businesses creating increasingly effective and nuanced pricing strategies, ultimately contributing positively to their overall performance.