As e-commerce and omnichannel share of retail sales continues to rise, knowing your market position and competitive landscape is increasingly more important to delivering your retail strategy. In the digital world, customers have more options than ever before and with a quick search on their smartphone can quickly compare prices for the products they want to buy.
Potential customers are already using a form of product matching for price comparisons. Shouldn’t you be one step ahead? Automating pricing decisions for margin and promotional strategies are already core to retail strategy, but the competitive landscape should also be accounted for or you will lose sales conversions once they do that quick search.
Product matching is one of the most important pieces of your price monitoring playbook, but what exactly is it and what makes it so important?
What is Product Matching?
Product matching is the secret sauce to a winning retail strategy. Product matching is finding the same or similar product to yours across the competitive landscape. It’s not always easy or straightforward. Some retailers can spend hours manually searching through competitors’ websites and still come up short to what the customer can see in their quick search across the web.
Fun fact OR Did you know? A person can match 80 images in an hour OR a person takes 16 hours to match 1000 products manually, something QL2 does in two minutes.
Why is Product Matching Important for E-commerce?
Product matching is a pivotal aspect of successful e-commerce operations. It holds numerous benefits that enable businesses to stay competitive and thrive in today’s dynamic market landscape:
- Assortment Overlap Understanding: By effectively matching products, e-commerce businesses gain a clear understanding of assortment overlap, ensuring their catalog strikes the right balance between differentiation and parity with competitors. This knowledge empowers them to curate a compelling and unique product offering that attracts customers while remaining competitive.
- Dynamic Pricing Alignment: Accurate product matching supports dynamic pricing strategies. Businesses can effortlessly update prices in line with their pricing strategy and sales/margin targets, whether manually or through automated pricing optimization tools. This agility allows them to respond swiftly to market fluctuations, gaining a competitive edge and maximizing revenue.
- Inventory and Availability Insights: Product matching provides valuable data on stock status at competitors’ sites, helping businesses make informed decisions on pricing and promotions based on marketplace availability. This knowledge enhances inventory management and ensures optimal product availability to meet customer demands.
- Unified Source of Product Data: Efficient product matching creates a unified and coherent source of product data, simplifying the management of e-commerce catalogs. Consistent and accurate product data across various platforms fosters a seamless customer experience, bolstering brand reputation and customer loyalty.
What Challenges do Companies Face When Making Matches?
- Messy and Non-Uniform Data: The lack of standardized data poses a significant challenge for product matching. Non-normalized brand names and inconsistent manufacturer names on different sites hinder the seamless matching of products.
- Gaps in Product Information: Websites may have incomplete or missing crucial product information such as UPC and model numbers, making it difficult to establish accurate matches.
- Time-Consuming Manual Matching: Manual matching of products is a labor-intensive task that consumes valuable time and resources. This manual approach often leads to inconsistent matching logic and inefficiencies.
- Lack of Internal Consensus: Defining and achieving internal consensus on product matching criteria can be tricky, potentially leading to inconsistent matches and confusion within the organization.
- Limited Coverage and Scalability: Traditional methods of product matching, such as sending people to physically inspect competitor shelves or manual web searches, may limit regional coverage and fail to scale effectively.
- Constant Price Changes: Frequent price fluctuations, especially in e-commerce giants like Amazon, require businesses to have access to real-time data for competitive pricing decisions.
- Risk of Bad Matches: Using shortcuts or relying solely on model numbers for matching can result in inaccurate and unreliable product matches, leading to customer dissatisfaction and lost sales. Model numbers are shared across products. Click here to view an example.
Stay tuned to the next installment of our product matching blog series which will go into the “how”— how QL2 solves the product matching challenges that companies face when making matches.
Written by: Oliver Kuntz, VP of Product