In the hyper-competitive world of ecommerce, pricing is everything. Online shoppers have access to an endless array of options and can easily compare prices across multiple retailers with just a few clicks. In fact, a study by Salesforce found that 57% of consumers regularly compare prices before making a purchase. To stay ahead in this race to the bottom, you need to keep a watchful eye on your competitor‘s pricing around the clock.
But with potentially hundreds or thousands of products in your catalog, spread across dozens of competitor websites and marketplaces, manually tracking prices is simply not feasible. That‘s where automated competitor price monitoring powered by web scraping comes in. By programmatically extracting pricing data from competitor websites, you can keep tabs on their every move and adjust your own prices in real-time to stay one step ahead.
Why You Need Competitor Price Tracking
In case you‘re not yet convinced, here are a few key reasons why every online retailer needs to be monitoring competitor prices:
1. Consumers are price sensitive – In a survey by Klarna, 67% of shoppers said price was the most important factor when making a purchase online. If your prices are not competitive, you will lose sales to rivals with better deals.
2. Prices change constantly – Gone are the days of setting prices once and forgetting them. Major retailers like Amazon and Walmart update their prices multiple times per day. Amazon alone makes 2.5 million price changes every day according to Business Insider. You need to be able to keep up.
3. Price perceptions affect your brand – Even if a shopper doesn‘t buy from a competitor, seeing that they have consistently lower prices can negatively impact how consumers view your brand. A study by Profitero found that 55% of shoppers say they are less likely to visit a retailer‘s website in the future if they find lower prices elsewhere.
4. You can increase margins – Competitive pricing is not a race to the bottom. By monitoring competitor prices, you can identify opportunities to raise your own prices on items where you have a competitive advantage. One case study found that an online retailer was able to increase gross margins by 37% through strategic price increases based on competitive data.
How Web Scraping Powers Price Monitoring
So how exactly does web scraping enable you to track competitor prices at scale? Here‘s a quick overview of the process:
A web scraping tool or bot is pointed at the target competitor websites and given instructions on what data points to extract (product name, price, etc.)
The scraper loads the web pages and parses the underlying HTML code to locate and extract the relevant data points
The extracted data is cleaned, structured and exported to a usable format like CSV or JSON
The scraped price data is fed into a database or analytics platform where it can be normalized, matched to your own products, and analyzed to identify gaps and opportunities
Pricing rules and algorithms use the competitor data to automatically adjust your prices to optimize for sales, revenue or profit margins
The scraper reruns on a set schedule (hourly, daily, etc.) to continuously pull in fresh pricing data and update your pricing strategies
By automating these steps with web scraping, you can monitor thousands of products across any number of competitor sites in near real-time. This would be virtually impossible to do manually.
Challenges of Scraping Competitor Prices
While web scraping is extremely powerful, there are some challenges you need to be aware of and plan for:
1. Anti-scraping measures – Many ecommerce sites employ techniques to detect and block scrapers, such as CAPTCHAs, rate limits, user agent checks, and IP bans. Using rotating proxy servers and spoofing headers is essential to avoid getting blocked.
2. Inconsistent product data – Product names, SKUs, and other attributes often vary between websites, making it difficult to match the same product across multiple sources. Fuzzy string matching and machine learning can help automate this process.
3. Frequent website changes – Websites frequently change their page layouts and HTML structures, which can break scrapers. Monitoring for changes and quickly adapting your scraping rules is critical to avoid data gaps.
4. Legal and ethical concerns – Some websites prohibit scraping in their terms of service and may take legal action if they detect unauthorized access. It‘s important to consult with legal counsel and only scrape data that is publicly available and permitted.
Best Practices for Price Scraping
To get the most out of your competitor price tracking program, follow these best practices:
1. Use proxies to avoid detection – Rotating your IP address with each request using proxy servers is essential to avoid rate limits and IP bans. Residential proxies from providers like Luminati and GeoSurf are best for simulating organic user behavior.
2. Choose the right scraping frequency – Scraping too often can get you blocked, but not often enough means you miss price changes. Base your schedule on the volatility of your market and observed competitor behavior. For most retailers, daily scrapes are sufficient.
3. Normalize and match product data – Invest in data cleaning and matching processes to accurately compare prices for the same products between sites. Use all available attributes like name, brand, MPN, UPC, size, color, etc. to improve match rates.
4. Monitor a wide competitive set – Don‘t just track your top 2-3 head-to-head competitors. Benchmark prices across a broad range of players in your vertical to get a complete picture of the overall market landscape and uncover opportunities.
5. Integrate data into ops and BI systems – Raw scraped data is not very useful on its own. Push it into your ERP, pricing engines, and analytics tools where it can be modeled, visualized and acted upon. Look to automate the end-to-end data flow for maximum efficiency.
Measuring the Impact of Competitive Pricing
To get buy-in and justify the investment in price monitoring, you need to show the impact on the bottom line. Here are a few key metrics to track:
- Price index vs. competitors – Calculate your average price position relative to the competitive set for each category and the total catalog. Track this over time.
- Price match rate – What percent of your products are priced at parity with the lowest competitor price? Higher is better to win price-sensitive customers.
- Margin and revenue impact – Model out the estimated increase in sales and gross profit dollars from price adjustments. Compare this to actual results.
- Pricing efficiency – Track the speed and accuracy of yourPrice changes based on the freshness and quality of competitor data. Aim to shrink the lag time.
According to a report by 360pi, retailers who implement a competitive pricing strategy see a 4-9% increase in sales and a 3-8% increase in gross profits on average. For a retailer doing $100 million per year, that‘s an extra $3-8 million in profit!
Future of Competitor Pricing
As ecommerce competition continues to heat up, the importance of competitor price monitoring will only increase. Here are a few emerging trends to watch:
1. AI-driven pricing – Leading retailers are starting to use machine learning algorithms to predict competitor price changes before they even happen, giving them a leg up. By analyzing historical pricing patterns, these models can recommend the optimal price point at the SKU level.
2. Omnichannel price monitoring – With the lines between online and offline blurring, retailers need to track prices across all channels. Expect to see more solutions for monitoring in-store and print ad pricing to get the full picture.
3. Proxy arms race – As more retailers adopt web scraping, expect to see an arms race between scraping detection technology and proxy/spoofing techniques. Partnering with a data service provider will become essential to keep up.
4. Expansion beyond pricing – Competitor monitoring is not just about price. Expect to see more holistic solutions that track relative assortment, promotions, product bundles, and non-price levers to capture the full picture.
As Peter Smith, VP of Pricing Excellence at Revionics, puts it: "AI and ML are the next frontier in strategic pricing. The amount of competitive pricing data available is growing exponentially. Retailers who can harness it will be able to make surgical pricing decisions that drive both revenue and margins."
Conclusion
In the cutthroat world of ecommerce, you can‘t afford to be in the dark on competitor prices. Web scraping provides a powerful tool to automatically monitor prices across all your competitors and react in real-time. By staying a step ahead on price, you can win more customers, protect your margins, and ultimately gain market share.
But to successfully implement competitive price tracking with web scraping, you need to put the right people, processes and technology in place. This means:
Partnering with a reliable data service provider to handle the technical complexities of scraping
Establishing a disciplined process to cleanse, normalize and integrate competitive data at scale
Agreeing on rules and algorithms to automate pricing decisions based on competitive insights
Defining KPIs to measure the business impact and ROI of your pricing program
Continuously adapting your pricing strategy as the market evolves and consumer behaviors shift
By following the best practices laid out in this guide and keeping an eye on emerging trends, you can build a world-class competitor price monitoring operation that gives you an edge in the market.
Don‘t wait until it‘s too late – take the first step today to start tracking competitor prices and take control of your ecommerce performance. Your bottom line will thank you!