Amazon (NASDAQ:AMZN) and Sears (NASDAQ:SHLD) top a new list of most price dynamic retailers, changing prices on the highest percentage of inventory on a daily basis.
A new report by 360pi, provider of competitive price intelligence, reveals that among the top 500 Internet retailers the level of price dynamism varies dramatically. Some retailers change prices on as much as 20 percent of their inventory during the course of a "normal" shopping period.
The most price-dynamic retailers are Amazon and Sears, with both changing prices on 15 percent to 20 percent of their 360pi-sampled assortment on a daily basis.
But this activity doesn't necessarily correlate to online dominance. "While Sears is one of the most price-dynamic retailers today, they own a much smaller portion of the digital shelf, accounting for just under $5 billion in online sales in 2013 compared to Amazon's more than $67 billion in 2013 sales and a much higher ownership of the digital shelf," states the report.
Apple and Staples are the least price-dynamic retailers, hovering around zero percent, while Walmart changes prices on 6 percent to 8 percent of its assortment daily, landing the world's largest retailer squarely in the middle.
Even among the more price-dynamic retailers, 360pi's data shows a wide range of fluctuation in price changes by time-of-day and day-of-week. For example, Costco and h.h.gregg make most of their price changes on Saturday and Sunday, Target makes the majority of its price changes on Tuesday and Saturday, and Amazon's changes are evenly dispersed throughout the week.
The most price dynamic retailers are making changes on not just a daily, but on an hourly basis. Amazon made eight price changes in one day on a single item tracked, a wireless router. Interestingly, while Amazon typically responded to competitor price increases, it did not match those prices. Amazon marketplace vendors, however followed the retailer's price increase in a matter of hours.
"Daily price dynamism, including hourly price changes, will continue to play an important role in ongoing pricing but will be especially important in the 2014 holiday shopping season," said Jenn Markey, VP of marketing, 360pi. "We see amazing things happening with pricing every day as we gather information on millions of products from every corner of the Internet. When we look at how the prices for individual products change throughout the day, we are able to identify some interesting trends by category and retailer, including who tends to follow whom."
360pi's research showed these daily price changes can easily double at peak times in key categories such as back-to-school and the holidays.
As retailers head into the holiday season, dynamic pricing will likely play a large role for online retailers. The need to match competitors' prices will be great, and Amazon will likely be the one to watch when it comes to quickly identifying and meeting price changes.
-See this 360pi report
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