“Are my prices too high? Am I pricing myself out of the market?”
“Are my prices too low? Am I losing margin unnecessarily?”
“Are my competitors outpacing me because of my pricing and assortment decisions?”


If you ask yourself any of these questions, the follow-on is: “How do I find out and what can I do about it?”

The good news is that technological advancements can provide real, actionable answers..

In just the last couple of years, data about competitors’ pricing and product assortments has become available for more and more mid-sized retailers. We no longer need to send someone down the road to visit a competitor and jot down pricing information. We can simply collect it online ourselves or purchase it from third party services.

This opens up a range of possibilities:

  • Understanding our competitors’ assortment of brand names and price points within categories.
  • Choosing our reaction to competitors’ price changes rather than being surprised when customers either walk out without buying or don’t show up at all.
  • Increasing margins to improve the bottom line without having to reduce customer service levels.
  • Choosing the products on which we wish to be price competitive.

The ability to understand competitors’ pricing and the range of price points they offer opens up exciting new possibilities to maximize margins by tuning prices.

In the density plot above we can see that most of Competitor A’s products in this category cluster around the $250 price point. But our products (the black line) have two distinct price point clusters at $180 and $260.

A sudden pricing change by a competitor may shift this distribution of price points. The process of responding quickly to competitor’s price changes involves using software to detect changes and recommend actions (such as raising or lowering our price) to a buyer or analyst. This maximizes the efficiency and speed of the process.

A more long term process includes looking for seasonal opportunities. By tracking our pricing and our competitors’ pricing over time we see differences in when seasonal items are made available and eventually marked down. Are we seizing the pricing advantage on Christmas or summer season products?

Price * Quantity Sold = Revenue

All retailers understand that pricing is about optimization. We want to understand the customer’s price sensitivity. At what point will a higher price prevent a sale? Understanding the competitor’s pricing on equivalent products is one piece of solving this optimization problem.

Another optimization opportunity is around brands. Seeing the number of products stocked by brand in a category can be informative if customers are brand sensitive.
competitor brand assortment

Pricing Intelligence is a new world for mid-market retailers. It opens up a wide range of possibilities and allows retailers to be confident that they understand more about their competition.