How Dynamic Pricing Helps Ecommerce Businesses Maximize Profits
Black Friday is approaching and the competition is stronger than ever. Take advantage of dynamic pricing with the power of web scraping to increase sales and maximize profits.
Black Friday – the first Friday after the Thanksgiving holiday in the United States – is one of the busiest shopping days of the year. Everything from website hosting to jewelry seems to be going for sale, and that gets more and more important over time.
According to statistics from the National Retail Federation, nearly 190 million people shopped during the Black Friday weekend in 2019, up 14% from 2018. While 2020 has seen a decline, dropping spending at 2018 levels, overall spending in 2021 is up nearly 30% from 2020, according to Harvard’s Recovery Tracker. It wouldn’t be surprising to experience a wave of Black Friday that would blow 2018, 2019 and 2020 out of the water.
Big Data Trends Show Growing Importance of Black Friday
Whether online or offline, Black Friday is a big deal and our work at Oxylabs verifies it. Data from our 2020 Web Scraping Data and Trends report suggests that marketers have taken data insight more seriously by increasing web scraping resources by nearly 30% in 2018 and 13% in 2018. 2019. This represents a massive 43% increase in two years.
No longer a luxury for big players, data mining is becoming a necessity, especially for organizations that want to survive the current recession. McKinsey data suggests that organizations using advanced marketing techniques outperform their competitors by 85% in sales growth and an impressive 25% in gross margin.
Besides sales, businesses grow faster and get a bigger footprint in the market when big data is leveraged. The research confirms this, verified in a recent report by Forrester Research which found that companies engaged in web scraping are outperforming their competitors with average growth increased by at least 30% per year.
Take advantage of web scraping with dynamic pricing
Imagine being able to discover a competitor’s sale and jump in with a better deal at a critical time. Now imagine being able to do it in real time automatically. This idea is at the heart of dynamic pricing – a strategy that uses flexible pricing based on supply, demand and competitor prices.
While the notion of price change may seem strange or unfair to some, dynamic pricing is ubiquitous on the internet. Consumers see it, even if they may not notice it, constantly on travel websites, where hotel and flight prices often change several times within hours. It is also seen in flash sales of electronics or other consumer goods on price aggregator websites.
Web scraping is at the heart of any strategy involving dynamic pricing, and the quality of the data obtained is essential to its success.
Key factors to consider for dynamic pricing
Dynamic prices depend on several changing factors. Web scraping is used to track some of these factors in order to arrive at the most profitable price.
Internal factors are those that govern the supply in dynamic pricing. They include factors such as stock quantity, production costs, and shipping costs.
Different rules also apply to different businesses. For example, some rare items become more valuable when inventory is low (such as limited edition designer clothing), while other items are better to sell as quickly as possible (such as older models of phones). Internal web scraping can be targeted to accommodate different business models depending on their industry and sector.
External factors that affect pricing are generally external to the organization and can include holiday events (like Black Friday), increased competition from emerging brands, technological innovation, and seasonal changes. Web scraping usually tracks multiple factors simultaneously, ensuring that a seller’s prices are competitive at all times.
Web scraping is actually (very) complex
Web scraping is quite complicated, comprising several processes which include: crawling the internet with predefined targets and data points, extracting data, analyzing data (so that it can be read), then the price adjustment.
The dynamic nature of data on the Internet can make the process particularly difficult, as website structures and formats are constantly changing due to different coding methodologies. Therefore, web scraping scripts need to be constantly tweaked and implemented appropriately, although technology evolves to combat this problem.
The latest developments and research have shown that focusing on a specific category of pages or websites is the most effective approach. This information was the reason why we separated our Real-Time Crawler solution into three APIs, each dedicated to a specific industry (e.g. E-Commerce Scraper API).
Another serious problem is the blocking of the scrapers. Data-rich sites have data demand limits, often using algorithms to detect bot-type activity. When requests are exceeded, servers are triggered to ban specific Internet Protocol (IP) addresses in an effort to avoid server overload.
Requesters often respond using data centers or residential proxies – intermediaries that have a specific IP address that can mimic human activity or a separate device. This allows scrapers to distribute requests in order to collect data in a way that does not overload the servers. In addition to ensuring that servers are not overwhelmed, ethical web scraping typically uses practices to transparently obtain proxies that rewards participating users.
Ethically purchased proxies are of higher quality, resulting in more stable connections for increased success and improved efficiency for the web scraping process. The end result is a win-win for both parties where users are paid while customers are rewarded with better data mining results.
Dynamic pricing can level the playing field for smaller players
The digital landscape is not always fair. The bigger players often have technological advantages as well as larger internal teams that can get smaller players out of the ecommerce game. Fortunately, technology solutions exist for small businesses at a fraction of the cost that can level the playing field.
Dynamic pricing through effective web scraping is one solution available to small businesses that can help them survive – and even thrive – this Black Friday and beyond.
Not everyone has to be a big box chain. Given how consumers are diversifying and demanding better quality, the odds are likely to tip in favor of small businesses that are ready to play the game under the new rules.