Whether or not customers buy your products depends on the perceived value of your offer. In turn, the latter comprises three elements: product quality, price, and the brand’s image. Customer dissatisfaction with one of the elements can undermine the perceived value and reduce demand. Pricing is a likely cause of dissatisfaction as modern customers are price sensitive. A recent poll has shown that nearly half of the British and American respondents have switched from a familiar brand to a new one due to the cost factor in the last three months.
To prevent customer attrition, businesses must set rates for their products and services intelligently, that is, with a clear understanding of how their rates fit in the broader market context. This is when tracking prices come into play. With its help, businesses obtain the data required for holistic competition analysis and smart pricing. This article introduces you to the basics of prices monitoring and explains how to make the process more effective with proxies.
3 Ways Tracking Prices Can Benefit Your Business
Now, how exactly does tracking prices impact your business? Let us take a closer look at some significant benefits that the practice of competitive price tracking implies.
Smart pricing decisions
First and foremost, monitoring prices charged by competitors allows a business to make smart decisions about its own pricing strategy. Thus, for instance, the use of price monitor tools can help a business spot areas where it can become the lowest cost vendor and those where it can increase the rates due to low competition. To enjoy these opportunities, a business needs to monitor online prices on an ongoing basis.
A better understanding of consumer preferences
Another argument favoring tracking prices is that it provides valuable insights into consumer preferences. To take advantage of this benefit, you need to collect and analyze pricing data for several years in a row, which will allow identifying recurring trends in customer behavior. A better understanding of consumer preferences helps forecast demand effectively and adjust the rates accordingly.
Increased effectiveness of promotions and discounts
Exclusive promotions can significantly boost sales on the condition that you choose the right time and context for them, which is why it is advantageous to track competitors’ prices. On the one hand, this should allow you to timely lower the rates if the competitors have already done that. On the other hand, tracking prices enables you to beat the competition and organize a fantastic promo event ahead of other market players.
How Price Monitoring Works: Tools and Practices
In a nutshell, prices monitoring involves collecting pricing information from your competitors’ websites. This information can further guide your pricing decisions and help ensure you are not overpricing or underpricing a particular product or service.
To ensure your competitive price tracking is truly effective, you must carefully plan three aspects:
- Who to monitor: Before you track competitors’ prices, you need to develop a clear idea of who these competitors are. Thus, for instance, there is no need for a mass market fashion retailer to collect pricing data about a company operating in the affluent mass segment because they target different audiences. A thorough competitive analysis will help identify your actual competitors and prevent wasting time and resources.
- What data to collect: Apart from deciding whom to monitor, you also need to determine what kind of information you are after. Along with rates as such, you might want to collect other product-related data to achieve the best results in retail price monitoring. The optimal set includes product attributes, name, description, promotion, and dissatisfiers.
- What tools to use: Once you have determined all details of your monitoring process, it is high time to find the appropriate executive. The role of a pricing monitor can be assigned to a web scraping bot or the so-called web scraper. The latter will download robot.txt files from target websites and retrieve the necessary data from the URLs, which these files contain in spreadsheets. Besides the competitive price analysis, this price monitor tool can help you with sentiment analysis and lead generation. Other tools commonly used to monitor online prices are RPA bots and in-house price scrapers.
The Role of Proxies in Monitoring Prices
At this point, the question arises regarding the role of proxies in eCommerce competitor price monitoring. To answer this question, we need to take a step back and say a few words about how a proxy empowers web scraping. In simple terms, web scraping implies data extraction from a website. In the case of competitive price tracking, the extracted data is rates and various product attributes. The key point here is that if you try to harvest large volumes of data with your real IP, you will likely encounter obstacles such as IP bans or geo-blocking. To overcome these restrictions, you need
- more than one IP (usually hundreds or thousands of IPs);
- IPs in different geographic locations.
This is precisely what proxies provide you with as they route your requests through their IP pool. In this manner, you use proxies together with a price monitor tool (e.g., a web scraping bot) to enable the latter to do its job without being impeded by bans or geo-blocks. A good proxy provider will typically give you access to its rotating proxies that route your requests through a new IP for each connection. Hence, if you need to scrape a hundred websites for your pricing monitor project, you will access each website from a different IP. If one proxy gets blocked, you replace it with a new one. If a proxy cannot access content due to geographic restrictions, you replace it with the one to which these restrictions do not apply. All this can be done automatically with minimal involvement on your part after you have configured proxy settings.
To sum up, a proxy plays a vital role in prices monitoring as it allows for continuous data harvesting and unrestricted access to data in different geographic locations.
How Proxies Benefit Competitive Price Tracking
Because monitoring prices implies web scraping, the use of proxies is necessary to achieve the best results. Here are a few ways a proxy contributes to the process of prices monitoring.
Anonymity and security
As you monitor competitors’ prices and harvest data about their products, you want to remain anonymous for at least two reasons. First, you cannot show your IP to websites you are scraping because if they get too many requests from this IP, it will receive a 4-XXX error or a temporary ban. This is why keeping your IP hidden is in your best interest.
The second reason to stay anonymous is that you do not want third parties to learn the details of your price intelligence strategy. In the meantime, these details remain an easy target for malicious users as long as your Internet activity passes through your Internet Service Provider. One of the main benefits of proxies is, thus, their anonymity guarantees: by routing your activity through their IPs, proxies help keep your requests secret from both target websites and malicious users.
Scraping speed and volume
Another serious benefit of proxies is that they allow for the continuous harvesting of large-scale volumes of pricing data. If your web scraper has to work without proxies or if you only use one proxy with it, chances are it will soon be detected and banned. More than that, many websites have a crawl rate limit for the number of times your bot can request a particular URL daily. This means that you will need to make intervals between scraping sessions, and the whole process will be lengthier than desired. However, if you build a proxy pool to support your pricing monitor project, you will route your requests through different IPs and harvest more data in less time.
The IP bans mentioned above are not the only obstacle your web scraper will likely encounter when harvesting pricing data for you. Geo-blocking is another serious issue you must somehow manage because there will be situations where access to the target content will be restricted due to your geographic location. Proxies help solve this problem as good proxy providers enable you to choose from hundreds of geo-locations at both state and city levels. With the help of a proxy, your bot can access any website and harvest the target pricing data, notwithstanding the geo-blocking factor.
Which Proxies are Better Suited for Monitoring Prices?
Once you decide to use a proxy for price monitoring, you might be wondering which to choose, data center or residential. Without going into detail, both types can be used to monitor online prices with good results. In the meantime, there are some essential differences in their key features which you should consider when choosing an optimal proxy solution. For your convenience, we have collected key details about the data center and residential proxies in one table. Here, you can find more information about their features and use cases.
|Datacenter proxies||Residential proxies|
|IP type||IPs are based in data centers;High anonymity;IPs are static;You typically use one IP for a month or more.||IPs are connected to Internet Service Providers;Hard to detect;IPs are dynamic;You usually use one IP for several minutes.|
|Connection speed and performance||Fast connection;Minimal risks of a shutdown.||Connection speed varies from super fast to really slow depending on the device;Country- and city-level geotargeting;Effective filter bypassing.|
|Pricing and availability||More available as they use IPs based in data centers;Generally cheaper than residential proxies;Prices vary depending on type: private or shared.||Less available because they use real IPs issued by Internet Service Providers;More expensive.|
|Risk of bans||Easily identifiable;Medium to high risks of ban depending on whether you use private or shared DC proxies.||Hard to identify since they use real IP addresses;Low risks of being blocklisted or banned.|
|Reliability and security||Moderate||High|
|Some best use cases||Anonymous Internet activity;Projects with a small budget;Projects where the fast connection is a top priority.||Large-scale web scraping projects;Working with websites that blacklist data center proxies;SEO tasks and projects.|
Wrapping Up: Key Considerations for the Use of Proxies for Monitoring Prices
All in all, eCommerce competitor price monitoring is all about making the right strategic decisions. Let us summarize the key steps you are to take to build a comprehensive price intelligence strategy.
|#1 Determine goals and details of competitive price tracking||Before you begin, try answering the following questions:Who are your competitors?What data will you harvest for your monitoring project (e.g., pricing, product description, product name, etc.)?How often will you recrawl the websites?How will you use the data collected?|
|#2 Choose the price monitor tool||Consider the pros and cons of the following price scraping tools:Web scraping bots: automated data extraction, data input in spreadsheets, competitive price analysis, lead generation, sentiment analysis, etc.;RPA bots: copying/pasting data into databases/spreadsheets, sending data to users, modifying data under pre-set rules;In-house scraping scripts: the highest level of customization vs. substantial financial and professional resources.|
|#3 In-house vs. outsourcing proxy solution||Decide how you will use proxies for prices monitoring:In-house solution: perfect customization and complete control of the monitoring process vs. expenses, time, and professional resources;Outsourcing solution: easily accessed ready-made proxy solution and support in managing your proxy pool vs. lower level of customization and control.|
|#4 Rotating residential vs. DC proxies||Select the type of proxies that best fits the needs of your prices monitoring project:Rotating residential: high level of reliability, outstanding effectiveness, geo-targeting, and low risks of bans vs. high cost and lower performance speed;DC proxies: fast connection, high stability, huge IP pools, and low price vs. higher risks of being blocklisted and lower security.|
Yes, monitoring prices on websites is legal because this is publicly available information. More than that, from a legal perspective, whether you monitor online prices on your own or use a tool that does the monitoring for you is no different.
Yes, data center proxies are a good fit for competitive price tracking. The reasons to prefer these proxies to residential ones include low cost, fast connection, high stability, and extensive IP pools, to name a few. In the meantime, you should be prepared for the fact that DC proxies are blocklisted more widely than residential ones, and they are generally less secure.
In theory, there is nothing to prevent you from using your price monitor tool, for example, an RPA bot, without a proxy. The effectiveness of this price tracking endeavor will be relatively low, though, because the websites you scrape will most likely ban your IP because of too many requests coming from it. To avoid the ban, you will have to send requests in intervals which will make the monitoring process fairly lengthy. More than that, without a proxy, your price scraper will be unable to access certain websites due to geographic restrictions. In this manner, you will spend a great deal of time collecting a moderate volume of data.
While manual monitoring prices is not impossible, there are several impediments to its realization. First and foremost, the more competitors you have, the more problematic it will be to harvest their pricing data. Besides, to be effective and bring fruitful results, the process of prices monitoring needs to be continual, which is only achievable with the help of automated tools. Simply put, although you can manually collect some pricing data from your competitors’ websites, this is not price monitoring in the fullest sense of the word.
Price intelligence is not about dropping prices but rather about determining optimal pricing for each product or service. By simply dropping rates for all your products, you cut your own revenues without any objective reason for that. Tracking prices, in turn, helps compare your costs to those charged by other market players. As a result of this comparison, you adjust the costs in such a manner that they are still attractive to customers and, at the same time, bring you maximum revenues.
Getting free proxies is technically possible, but they are usually associated with serious effectiveness and security concerns. If you plan to use free proxies for prices monitoring, make sure you stick with trusted providers only. A good option, in this regard, is to turn to services that sell proxies but have a free trial. This will allow you to enjoy the benefits of high-quality proxies free of charge for a limited period of time.