How price optimisation impacts social commerce

According to research, social commerce sales will rise by 35.8 percent by the end of 2021. This significant increase is due to the high number of people now shopping online. It is also attributed to the number of social commerce platforms available today.

If you are a manager or executive, you understand that price optimization can scale your business. This strategy also gives you a competitive advantage, increasing revenue generation. 

1. Pricing Optimisation Improves Competition on Social Commerce Platforms

As the popularity of social commerce sites increases, more retailers are joining them. In particular, studies show that about 2.14 billion people in the world now prefer shopping online.

This increased number of people using social commerce also means that the competition rises. Hence, brands also have to come up with new strategies to increase their revenue.

One ideal way to grow your social commerce business is by retaining customers. Still, if you do not offer them great deals and shopping experiences, they may shift to competitors. 

Developing an effective pricing strategy is the best way to compete. By offering the optimal selling price, you can reduce costs and bring in more money. You can then direct the resources towards pushing your products to a larger number of potential buyers. 

2. Beating Inflation

Inflation is an enemy to most, if not all, businesses. It causes the price of raw materials to rise, increasing the cost of production. You will then need to sell goods at a higher price, which may discourage buyers.

Price optimisation is an ongoing process of increasing your profits. It involves continually developing pricing strategies that can adapt to inflationary economic conditions. For example, you can monitor different products' price elasticity and beat the effects of inflation to make the most of social commerce.

3. Simplifies Strategizing

Another role of price optimization is that it allows you to strategize. By considering various factors in the market, you can set the best sale value for your products. Such aspects include:

• Costs

• Targeted buyers

• Competitor's prices

• Inflation

Instead of having specific SKU prices for the whole year, price optimization allows you to change them accordingly. This way, you boost sales during specific periods like holidays, Black Friday, and Cyber Monday.

4. Allows the Use of AI 

Another way pricing optimization affects social commerce is by supporting AI use. So, what is the relationship between AI pricing and social commerce? 

From my experience, AI pricing is the best way to optimise the value of your products. Using machine learning technology, you can quickly analyze data relating to your customers and market.

AI can account for all internal and external factors when suggesting a price. For example, it can take into account all market segments. After that, the AI recommendation engine will recommend a price for each segment using predictive analytics.

This way, you can decide the prices to sell products on specific social sites. You will also be more competitive since you know what each market is willing to pay.

5. Optimization Simplifies Pricing Several Products 

Having been in the retail and tech world for quite some time, I know that setting values for many products is stressful. When there are many factors to consider, this process can be very challenging.

Luckily, with price optimization, you can quickly determine the best money value for all your SKUs. It's also easier to price across all social commerce sites.

By leveraging methods like AI, retailers can automate the process of creating product promotions. Instead of worrying about the next holiday sale, automate pricing and focus on other tasks. A pricing optimization tool will help you generate discount offers to attract more buyers while still optimizing profits.

How to Optimise Prices for Social Commerce

Now that you understand the role of dynamic pricing, it is also important to know how to leverage it. The exact process for ensuring your SKU has price elasticity may differ depending on your company brand and products. 

The first step to dynamic pricing is analyzing your business. Here, identify your key strengths and use them to grow on social commerce sites. This way, you can make your products more marketable despite their price.

When analyzing your company, there are various details you'll need. These are:

• Your products availability

• Current economic conditions

• A defined pricing strategy

• Seasonal conditions

Getting these details will help you optimize sales on social commerce platforms. You can also calculate product price elasticity using the demand for your goods and related items.  

The next step to optimizing prices is learning more about your customers. Do they think that your products are worth the selling price? Are there any complaints about the quality? More ways to optimize pricing for social commerce are identifying value metrics and analyzing market data.

Boost Price Optimisation With the Best AI Pricing Tool

The best dynamic pricing strategy for social commerce is using an AI pricing tool. But, do you know how to pick the best one for your brand? Which exact features do you need the software to have?

When looking for a pricing optimisation tool, I think the wisest method is to determine your needs first. If you don't consider the critical aspects, you may pick the wrong one and be among the 85 percent of the AI projects that fail.

Before getting software, check if it has enough historical data for your field. Besides, confirm that it provides different pricing strategies for inflationary economic conditions.

Selecting a tool with these features will improve efficiency. It also reduces the amount of data you need to analyse for each social commerce site.

As a professional in the tech field, I know that user experience is a vital aspect of selecting software. AI pricing tools should help you, not cause more headaches. When looking for a suitable one to ease pricing optimisation, look at its interface. 

Will your staff have an easy time using it? Will you constantly need to train them and spend more money? By answering these questions, you can easily pick an AI pricing tool with all desirable features.

Improve Pricing Optimisation Today

Pricing optimisation has significant effects on the demand for your products on social commerce platforms. Using the right strategies, you can enhance price elasticity and boost sales. Optimization also supports the use of technology like AI pricing tools to streamline workflow and leverage social commerce.