This is an explanation of Market Conditions and how it can bring added value to your pricing strategy. If you’re looking for more implementation tips and practical examples, you can find some at the end of this article.
Historically, Omnia’s dynamic pricing business rules were geared towards the product assortment. Rules are set on product variables that you have pre-set in Connect and are updated via your product feeds. The addition of ‘Market Conditions’ offers you the possibility to go a step further and include external market data in your pricing strategy. This enables you to fine tune your strategy by adding an extra layer to the rules you want to apply. Market conditions allows you to take the number of competitors, your current position vs competitors and your price vs aggregated market data (e.g. average price, most occurring price) into account.
Market conditions are very useful in a variety of situations:
- Create some tranquility in the market and not follow each price down
- Allow a price gap between certain competitors
- Aspire to mainly focus on your major competitors without ignoring other players in the market
- Predict and take opportunity of a situation where you can price up and get more margin
- Lower the number of price changes and adjustments to be made, especially if you own a physical store
Within Market conditions you can choose one of three templates:
1. When a certain number of competitors are present for that product:
This template allows you to focus on a specific set of competitors and only apply the business rule if a certain amount of these competitors are, or are not, offering a particular product.
Example:
For instance, let’s take this list of competitors and prices as a reference:|
Bol |
€900 |
|
Amazon |
€1000 |
|
Mediamarkt |
€1100 |
With the below template, the rule will only apply if exactly one competitor out of Bol, Amazon, and Mediamarkt offers the product.
In this template you set a condition on how many of your selected competitors sell a product for lower or higher than your own selling price (or any other Connect field).
Example
Again, let’s use the example from above. If your current selling price is 950 euros, then this template will return true and apply the action as Bol sells the product for 900 euros.
3. When a minimum/maximum/average/most-occurring price is lower/higher than my selling price: This last template uses aggregated data in the market to compare your own selling price with that of your competitors.
Example
With the below example, if your current selling price is 1050 euros, this market condition will apply the rule as it is higher than the average price of your selected competitors (Bol, Amazon, and Mediamarkt)
Now that you are more familiar with what Market Conditions are and the superpowers they can bring you, take a look at how to start including them in your pricing strategy.