Study: Online retailers discovering dynamic prices

Veit Zimmermann

Teamlead Catalogue Management

According to a study conducted by the Industry Association for E-Commerce and Mail Order in Germany (bevh) and Creditreform Boniversum, prices in e-commerce are increasingly becoming dynamic. Approximately 40 percent of online retailers and mail order companies in Germany are already using “dynamic pricing”. This means that retailers adjust their sales prices at very short notice according to the prices offered by competitors or the ordering behavior of customers. One in five companies are planning to introduce this instrument in the coming twelve months.

Dynamic Pricing

A major example is being set by Amazon: Experts judge that Amazon.de adjusts prices approximately 3 million times a month. “It is usually only by tiny amounts” Amazon boss Ralf Kleber recently told the “Süddeutsche Zeitung” newspaper. “Basically, it is nothing new that retailers adjust their prices to take supply and demand into account” said the main managing director of bevh Christoph Wenk-Fischer. He went on to say that intelligent software solutions, however, offer retailers a much more customized way of fixing prices, helping them stand their ground in today’s dynamic and globally connected competition.

According to the study, interactive online retailing and mail order is continuing to boost growth in the German retail trade. More than two thirds (68 percent) of e-commerce and mail order retailers rank the prospects for the next twelve months as “very good” or “good”.

StoreShip helps brick and mortar retailers

But what will happen to brick and mortar retailers when online businesses start to adjust their prices on platforms more and more regularly, leading to a drastic cut in the time interval between price changes? When these price changes can be made accessible and visible to everyone thanks to the growing use of smart phones and the internet? Specialist retailers are faced by a problem, as they display prices at their PoS which are no longer up to the minute, they cannot keep up with the internet and are finding themselves increasingly under pressure.

One in every two customers now compares prices online. In the era of the smartphone and the internet often even directly in store! Brick and mortar retailers are faced with the new challenge of how to respond to this unprecedented price transparency. This is the very challenge tackled by the Brodos StoreShip price.

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Image: Customers even compare prices in store.

The StoreShip price always remains completely up to date with fluctuations in online prices being monitored at all times, based on constant research. All 250,000 products on brodos.net are verified and updated daily online. In addition, prices are transparent, i.e. all researched prices for a given product are compared against each other to better understand the “true” market price.

Calculating the StoreShip price

The StoreShip price addresses all challenges faced by brick and mortar retailers, e-commerce players and manufacturers. The specific advantages of online and offline channels shape the calculation of a fair retail price.

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Image: Process chain showing how StoreShip price is determined.

Kiosk technology makes prices visible at PoS

The StoreShip price is made visible at specialist retailers thanks to our brodos.net kiosk or online shop and brodos.net. All StoreShip prices for all products are shown on the Brodos platforms. Our tools make it possible for specialist retailers to secure the best purchase price, resulting in turn in a fair price for the consumer, as the calculated StoreShip prices are only displayed if the possible retail price is competitive with the online price. At last, brick and mortar retailers can keep up successfully with e-commerce players!