The retailer discovered several items it was underpricing, and adjusted for better profit margins. It now uses the technology from vendor Indix to track competitors’ and industry-wide pricing.
Since implementing new web-based technology to track competitors’ pricing and promotions on more than 90,000 product SKUs, one large drugstore retailer—which declined to be named for this story, but operates both physical stores and several web sites—has been more competitive across more of its vast catalog, a senior manager says.
The retailer participated in a beta test of the pricing technology tool from vendor Indix over the last eight months, she says. Indix, which has completed its beta program, crawls about 10 competing e-commerce sites as frequently as every day, depending on the retailer’s requests. The drugstore looks at reports about once a week to decide on pricing or promotional changes it wants to make in response, the manager says.
For example, if all its competitors are pricing paper towels at 15% off, it may decide it also wants to discount paper towels. Indix also provides statistical data on the distribution of competitors’ discounts and pricing schemes, for instance in this case, the number of them offering 0-10% off paper towels, 11-20% off, 21-30% off, etc. For now, the retailer is only using the technology to monitor and adjust its web pricing, the manager says.
“Indix has definitely helped us drive sales while also improving our margin,” she says, without giving exact figures. “It’s also much more efficient.” The tool saves at least four hours per week of work that the retailer’s staff used to spend manually checking prices for key items or trying to piece together less-exhaustive pricing data from other vendors, she says.
The web-based technology helps the drugstore in three main areas, she says. First, it shows each competitor’s price for every item the retailer tracks. The retailer also uses Indix to look at higher-level trends. For example, it can track how the entire industry adjusted pricing on electric toothbrushes over the course of a month, she says. Thirdly, Indix provides category or brand-wide data, such as how competitors are pricing and promoting all Pampers products, be they diapers, wipes or other baby items.
“With most pricing intelligence tools, you’d have to look at every SKU for Pampers and track the average discounts, et cetera, over time,” the manager says. Indix, she says, can show in one dashboard the trends for all Pampers products across all retailers. It also allows her either to dig deeper and view Pampers prices at a specific retailer like Diapers.com, or view the average price history for Pampers products among all her competitors.
“Indix keeps records on all the information so you can look at historical trends—whereas other vendors usually give you just a snapshot,” the manager says. Looking at how prices have changed over longer periods than a few days allows the store to avoid responding to temporary price changes based on one-day spikes in supply or demand, for instance, she says.
Indix recently launched a new feature to track competitors’ digital promotions, including all the e-mails they send to customers, the manager says. The drugstore is not sure exactly how it will use that data at the moment, but she says she’s sure it will prove useful down the road.
“We can go back and look at what Target’s Cyber Monday promotions were, for example,” she says. “It’s really hard to collect data on promotion codes or promotions that are not embedded in the price of the product, so this is pretty cool innovation. There hasn’t been a good way to aggregate that info in the past.”
The vendor has also released a mobile app for accessing its pricing intelligence tool. The drugstore hasn’t tried it yet, but the manager says it might be valuable to try arming store associates with the app in the future so that they can help customers compare prices at competing stores and on the web.
She declines to say how much the retailer pays for the technology, but says it’s “definitely worth the investment.” Indix did not disclose its pricing.