Your e-commerce pricing strategy may be working quite nicely for you, until suddenly a brand-new competitor shows up, and suddenly a good number of your customers are flocking to that eTailer.

Your first reaction might be to restructure your own pricing strategy and undercut this new kid on the block, an impulsive move that could end up costing YOU rather than the new kid.

But before you jump off the deep end of the competitive landscape, unleash your inner Sherlock Holmes and sleuth out this new competitor. Learning everything you can about what the new kid is up to is referred to in e-commerce as “competitive intelligence,” and it could really pay off for you in the long run.

Navdeep Sodhi, the author of Six Sigma Pricing and its companion blog, cautions, “Intelligence gathering should be pragmatic rather than a wasteful collection of data” in this blog post. He then poses some thoughtful questions you can explore:

• Is the competitor a wild card across the country, or can we spot consistent patterns?
• Do they price aggressively everywhere or only in specific sales regions or for certain customers or products?
• How does the competitive offering compare with our product features?
• Is the competitor irrational [or] just reacting to our aggressive behavior?

Another handy tool for sussing out your competitor is this handy-dandy competitive pricing analysis checklist from FastTrac® GrowthVenture™. It walks you through figuring out where your new competitor fits in these three broad pricing strategies:

• Lower pricing
• Higher pricing
• Parity pricing

Once you’ve pegged your competitor, it’s also a good idea to find where your own pricing strategy fits on the checklist.

As you’re doing your detective work, keep this tip in mind regarding e-Commerce competitive intelligence: in today’s real-time, data driven, automated-technology world, it’s an ever changing landscape. In order to appropriately respond to today’s price transparent market, you need a stream of fresh data and the ability to act quickly.

Here’s where BlackLocus.com can serve as your Watson. Oh, sure, you could noodle around yourself and collect a bunch of information by spending hours and hours of Googling, manually spot checking prices, reading corporate reports, etc. But why expend all of that valuable time when BlackLocus.com can give you the data on your competition?

Once you’ve completed your investigation, you will have enough data to make an informed decision on how –– or even if ––– you’ll respond. And remember, look out for your own best interests above all else, and before you know it, that new kid on the block will just be another irrelevant eTailer.

Case closed!

Request a demo of the BlackLocus Pricing Engine and get a free competitive price analysis and consultation to see how you can quickly and easily see and monitor your entire competitive landscape and make educated pricing strategy decisions.