A new study by price intelligence firm Profitero shows that Amazon.com (Nasdaq:AMZN) raises and lowers the cost of over 2.5 million items on its website in a single day. Compared with an average of 50,000 price changes made by bricks-and-mortar retailers Walmart and Best Buy, it's clear to see that Amazon is on a mission to be the most price-competitive on the Web.
Data from the study also revealed that Amazon.com has increased its number of daily price changes tenfold during the past 12 months. In December 2012, the e-commerce giant implemented just 269,113 price changes.
With over 137 million items in its total inventory, 2.5 million price changes a day actually doesn't seem all that massive. Furthermore, across the Web, about 20 percent of all online prices change at least daily, according to a separate survey by Decide.com. Perhaps the more important takeaway from Amazon's repricing strategy is that retailers across the board are paying close attention to competitors' online prices, investing in sophisticated software and algorithms while battling to undercut one another by as little as 2 cents.
"It's staggering that Amazon.com is making millions of price changes on a daily basis," said Volodymyr Pigrukh, CEO and co-founder of Profitero. "Profitero predicts that the number of price changes is only going to increase as the retail landscape becomes more competitive."
While the goal is to attract customers with the lowest price, retailers also have to beware that too much price seesawing could actually confuse customers and drive them away.
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