How Pricing Software Integrates with Webshops & Its Benefits
May 5th, 2023 | 11 min. read
Pricing is a crucial aspect of any business, and for e-commerce webshops, it is no different. However, manually managing pricing can be a daunting task, especially when dealing with an enormous number of products. Imagine you are a clothing retailer with a webshop that offers various discounts and seasonal promotions running throughout the year. With a large number of products and constantly changing prices, it can be challenging to keep track of all the discounts and ensure they are applied correctly and that your profit margin is not leaking out between the cracks. Compound that with the requirements of keeping track of competitive product positioning and it can be the difference between winning and losing customers. Pricing software can help automate the process, making it easier for you as a retailer to manage prices, track sales, and ultimately improve profitability. But first, to reap the rewards, you will need to get the two systems integrated and working together smoothly in concert as if they were born together.
At Pricefx, since 2011 we’ve been assisting online retailers to integrate their webshops with our pricing software. Along the way, we learnt a lot and shared eventual amazing success stories with hundreds of companies following their pricing software integration journeys.
In this article, we will explore how pricing software integrates with webshops and the benefits it can bring to retail businesses just like yours.
How Pricing Software Integrates with Your Webshop
Trust me, once you have your pricing software integrated with your webshop, what it can do for your business is far more interesting than the integration process itself, but let’s examine the process regardless. The integration process is the same between web shops and pricing, but also that of your customer CRM, your ERP, promotion planning, search optimization etc. Whatever your go to market strategy is and your chosen tools, it is consistent everywhere across the process.
Integrating pricing software with an online shop using an API (Application Programming Interface) is a simple and common method used by many businesses, and most pricing software is integrated with webshops in this fashion.
An API is a set of protocols and tools that allows different software applications to communicate and share data with each other. By integrating pricing software with an online shop, businesses can automate pricing updates based on real-time market data, inventory levels, customer demographics, and more.
APIs can be a valuable tool for the retail industry to facilitate the analysis of customer data and optimize pricing strategies. By collecting data on various customer attributes, such as age, gender, and location, retailers can use APIs to track price adjustments and tailor pricing for different customer segments.
For example, a clothing retailer could use APIs to analyze data on customers who have purchased blue jeans in the past, live in a particular region and paid by Mastercard.
This data could then be leveraged through a pricing software solution to optimize pricing for this customer segment, based on factors such as demand, inventory levels, and competitor pricing.
The integration process typically involves setting up a connection between the pricing software and the online shop using the API. This connection allows the two systems to share data with each other in real-time. For example, when a customer adds a product to their cart, the online shop can send this information to the pricing software, which can then calculate the price based on a range of factors and send it back to the online shop. This ensures that the customer is always presented with the most up-to-date and accurate pricing information.
Think about it like an API acting as a conduit to getting your system wish list ‘order’ delivered to your pricing functionality. Much like when you go to the restaurant, the waiter is the real word ‘API’ heading off to the kitchen with your order and delivering your meal back to your table when it is done.
Other integration methods besides APIs may include webhooks, which allow one system to send automated messages to another system when certain events occur.
Another method is direct database integration, where the pricing software is integrated directly with the online shop’s database.
However, APIs are often the most popular choice for integration due to their ease of use, flexibility, and compatibility with a wide range of systems. Ultimately, the integration method used will depend on the specific needs and requirements of your business and the systems that your company employs.
To learn more about integration of pricing software with any number of different third-party systems, please check out this handy article below:
Once Integrated, 7 Things Pricing Software Can Do for Your WebShop
Integrating pricing software with an online shop can bring many benefits to retailers, including:
1. Increased revenue
Integrating pricing software with your webshop can help increase revenue by allowing you to optimize your prices in real-time based on customer demand, competitor prices, and other market factors. By adjusting prices automatically to ensure maximum profitability while remaining competitive, which can lead to increased sales and revenue. Additionally, pricing software can help you identify profitable cross-selling and upselling opportunities and personalize pricing based on customer segments, (even down to a segment of one – facilitating personalized pricing and product recommendations – can keep loyal customers and keep them coming back), further driving revenue growth.
2. Improved margins
Integrating pricing software with your webshop can help improve your profit margins by enabling you to set and adjust prices more efficiently and accurately. In fact, you can even simulate how changes to your price lists can influence your margins and plan your pricing strategies to shift on the fly to keep pace with the rate of change in the marketplace.
With pricing automation, you can quickly analyze market trends and customer behavior to identify the optimal prices for your products, reducing the risk of overpricing or underpricing. This can help increase sales and profitability while minimizing the need for manual price adjustments. Gone are the days where a retailer reviews competitors pricing every morning to suggest adjustments, you can respond to competitors in real time ensuring you never miss an opportunity.
Additionally, pricing software can help you optimize discounts, promotions, and bundling strategies to maximize revenue while minimizing the impact on profit margins, increased efficiency, and better data analysis. By personalizing prices and promotions for individual customers, retailers can improve customer loyalty and drive sales. This approach can also help capture pricing in the marketplace, entice customers with specific promotions, and increase the average basket size.
3. Respond to Competitive Pressure & Leverage Agile Pricing
One key benefit of integrating pricing software with an online shop is the ability to respond to competitive pressure and market forces with agility in pricing. Unlike in most physical stores where prices must be changed manually, online prices can be changed quickly and easily, allowing retailers to be more agile and responsive to market changes. This can be especially useful in capturing more revenue, as retailers can adjust prices in real-time based on demand and competition.
Integrating pricing software can also help retailers align their online and bricks-and-mortar prices. Some retailers may have electronic shelf tags, which allow them to have the same pricing agility (to shift prices on the on the fly) in their physical stores as they do on online physical stores, most retailers still rely on manually printed labels that require associates to physically change the price. With a pricing software integration, retailers can update prices across all channels simultaneously, ensuring consistency and avoiding customer confusion.
One example of a retailer successfully integrating pricing software with their online shop is MediaMarktSaturn, a German-based electronics retailer with locations all over Europe. MediaMarktSaturn uses electronic shelf tags, allowing them to have the same agility online as they do in physical stores. This approach has enabled them to align their online and bricks-and-mortar prices, making them more competitive and responsive to market forces.
If you would like to learn more on how MediaMarktSaturn implemented Pricefx pricing software technology to optimize its prices, check out the full case study by clicking on the image below:
4. Better Real-Time Data Analysis & Automatic Price Updates
Pricing software allows for automatic price updates in retail webshops by using algorithms and data analytics to adjust prices based on a range of factors such as demand, competitor prices, and inventory levels.
For instance, a fashion retailer can use pricing software to automatically adjust the price of a dress that is not selling well by reducing the price to attract more customers. By doing so, the retailer can improve profitability by increasing sales and reducing the amount of unsold inventory.
Additionally, pricing software can help retailers stay competitive by ensuring that their prices remain in line with the market, which can help attract new customers and retain existing ones.
5. Specified Promotions & Customized Pricing
Pricing software offers online retailers the ability to design and manage promotions with an elevated level of precision, effectiveness, and flexibility. For instance, retailers can create various promotional offers such as “buy one, get one free,” “percentage discounts,” and “free shipping” for a specified period, a particular category of products, or a specific customer segment using pricing software. They can also create tiered discounts, where the discount percentage increases as customers purchase more items, encouraging them to buy more and increase the overall sales volume.
In addition to promotions, pricing software also offers customized pricing based on customer behavior. Retailers can use customer data such as purchase history, browsing behavior, and abandoned cart items to create personalized pricing offers.
For example, a retailer can send personalized discounts to customers who have abandoned their carts, encouraging them to complete their purchase. With customer loyalty programs, tracking customer behavior is easier than ever, but utilizing each customer’s pattern to offer dynamic pricing is impossible without a system to automate. Additionally, retailers can offer personalized product recommendations and price offers based on customers’ browsing history and preferences.
6. Using Dynamic Pricing to Build Customer Satisfaction & Profit
Pricing software can enable retailers to implement dynamic pricing, adjusting prices in real-time based on market trends, demand, and competitor pricing. For example, a retailer can increase the price of a product in high demand or lower the price of an item with low demand to clear stock. Retailers can also use dynamic pricing to offer personalized pricing to specific customer segments, such as members of a loyalty program.
Pricing software-informed dynamic pricing can also help retailers provide pricing transparency by offering customers real-time pricing information. By doing so, retailers can create a sense of trust and transparency with their customers, thereby improving customer satisfaction.
For example, a retailer can display real-time pricing information on their website, including information on how prices are calculated.
By doing so, they can provide customers with a clear understanding of how pricing works and build trust with their customers.
7. B2B – B2C Sales Methodology Alignment
Pricing software can help an online B2C retailer set up an online or social media sales channel for the B2B side of the business by enabling customized pricing and discounts for B2B customers. Modern B2B customers expect a seamless buying experience that is consistent with what they have grown up with in B2C channels. They want to easily browse products, compare prices, and make purchases from the convenience of their office or mobile devices. Pricing software can help B2C retailers meet these expectations by providing a range of tools to facilitate B2B transactions.
One of the key benefits of pricing software is its ability to create customized pricing and discounts for different customer segments. B2B customers often require personalized pricing based on their order volume, payment terms, and other factors. Pricing software can automatically apply these discounts based on customer data, reducing the manual effort required to set up pricing structures.
Furthermore, pricing software can help B2C retailers create specific B2B pricing plans for their online or social media sales channels, ensuring that B2B customers receive the same level of personalized pricing as they would in offline channels.
How Long Does It Take to Implement Pricing Software?
By now, you should have an idea if pricing software is something that could benefit your online business and if transitioning from your current pricing system is on the cards.
You have read above that pricing software will streamline your webshop’s pricing system and have your team working smarter not harder on route to increased profits. However, it is perfectly normal you want to know how long it will take to have the software implemented and up-and-running.
At Pricefx, we know intimately how pricing software can assist companies to achieve their own unique set of business goals, but we understand fully that switching over to a brand-new system has its own set of challenges to overcome too.
To help you decide, check out our recent blog article on the implementation time involved:
Or on the other hand, if you have already considered the implementation time involved and have freed up your IT Team to get started, talk to one of our pricing experts now to begin your business transformation journey.