5 strategies that strengthens your competitive position

The consumption in Danish online shops increased by 15%, and since COVID-19, 70% of the Danish population now shops online every month.

It’s easier than ever to compare prices and get the best deal thanks to Google Shopping and PriceRunner. Consumers can easily set up a price alert to get a notification when their preferred product reaches the right price.

To the modern consumer, e-commerce can feel like trading stocks, with graphs of prices and deep insights into market-based pricing movements.

However, price is not the only factor. An e-commerce analysis from Danish Business Association shows that prices account for 23% of the reasons behind online shopping over physical stores. But it doesn’t explain how much price influences the final purchase decision. It’s often at the exact moment the consumer has chosen a product that the right price can win the sale.

It’s not about the “lowest” price—it’s about the right price

Pricing your products correctly is not about always being the cheapest. If your competitors sell a product for 67 euros, and you sell it for 47 euros, you are missing potential turnover and profit.

If you set your product price to 60 euros, you remain the cheapest while earning 13 euros more on each sale. If competitors match your price or lower theirs, you can adjust your offer accordingly.

Consumers don’t always prefer the largest discount. Finding a “better” price than expected creates a sense of getting a good deal and even triggers a dopamine response in the brain.

Stock status is more important than price

The biggest competitive factor is whether your product is actually in stock, but many webshops forget this. It doesn’t matter if competitors sell cheaper if they’re out of stock.

After Christmas 2020, we saw this with Oculus Quest 2. Many online shops sold at higher prices because the product was scarce across Danish webshops.

This is why you should use price monitoring software that tracks both prices and stock status of competitors. More importantly, if you’re the only retailer with stock, don’t lower your price.

The right price is the one your customer is willing to pay. It’s about supply and demand—and your competitors’ stock status defines part of that supply.

The cost price is your superpower

Only a few online shops consider cost price as part of their pricing strategy.

When competitors offer better prices, they usually have better cost prices. By purchasing in larger quantities and negotiating better with suppliers, you can lower your cost prices. You should always know which products and brands are most favorable to negotiate.

For your best-selling brands and categories, you typically have opportunities to negotiate better purchase prices. Take advantage of that to stay competitive.

Don’t compromise your pricing strategy. Set a minimum margin between cost and sale price, and stick to it.

Too many online shops set sale prices without calculating whether they’ll make a profit. That’s a major mistake.

Save money by linking your pricing data with your advertising

If you monitor prices and know when you lead, match, or trail the competition, you can save significant ad spend.

It’s common for CPC and CPM costs to rise on advertising platforms, so continuous optimization is essential.

One of the best ways to optimize is to cut out low-performing ads. Stop spending on clicks that will never convert.

For example, you can enrich your product feed with a custom label showing each product’s price position. Pause ads for products significantly more expensive than competitors and focus your ad spend on items with strong prices and good stock status.

Get it all together in a dynamic pricing strategy

Once your business is ready, combine your systems into a dynamic pricing strategy. With dynamic pricing, your webshop prices automatically change based on predefined rules.

These rules can factor in your prices, competitors’ prices, stock status, cost prices, and more. This ensures your pricing always stays accurate and competitive.

Once automated, your team saves time to focus on advertising, purchasing, and other key activities.

Bonus

When you have full control over pricing—and even automate it—you gain a strong competitive advantage.

Sportmaster, for example, uses a “live price” concept where selected items have dynamic prices. The price changes live to ensure consumers always see the best deal.

This kind of pricing strategy can directly strengthen sales and give customers confidence that they are getting the best price.

About the writer and No Zebra

Asger Storebjerg is Head of Paid Media & Products at No Zebra. We use PriceShape across several clients because our data shows that conversion rates often increase by a factor of 2–4 when prices are optimized.

We help Danish online shops grow both domestically and internationally. Ensuring the right prices through a data-driven approach is crucial to scaling effectively.

Our clients also include brand owners who use PriceShape to monitor their retailers’ stock and pricing, preventing brand devaluation through excessive discounting. The tool also reveals whether retailers have products in stock. Read more about No Zebra here: www.nozebra.dk