How to read a competitor price-gap report and decide what to do

A price-gap report lists products you and a competitor both sell, with both prices and the difference. The numbers are easy to read; deciding what they mean is harder. Here is a way to go through one without overreacting.

Start with the shape, not the rows

Before reading any single product, look at the split: how many shared products you are cheaper on, how many you are the same on, and how many you are dearer on. If you are dearer on most of them, you have a positioning question. If you are dearer on a few, you have a handful of products to look at.

Money and percent tell different stories

A gap of $2 is 20% on a $10 accessory and 0.2% on a $1,000 item. Percent shows how a shopper perceives the difference; money shows what it costs you. Sort by both. The products to look at first are usually the ones with a meaningful percent gap and enough sales to matter.

Check the match before the price

Every gap depends on the two products being the same. Open the pair and check the details that make products non-equivalent: pack size, model year, edition, color or size variant, and what is included. If the match is wrong, the gap is meaningless. This is why Tensorbasis asks you to approve each pair before it counts.

Look at the history, not just today

Open the price history of the pair. A competitor's price that dropped yesterday for a weekend sale is a different situation from one that has been lower for three months. Ask how long the gap has existed and whether it opened because they moved or you did.

Check stock and the wider offer

A lower price on a product they have out of stock is not competing with you. Shipping cost, delivery time and returns also change what a shopper pays, and a price tool only sees the shelf price.

What to do with a real gap

• You are dearer, and they are the main alternative: consider matching, or defend the difference with something visible, such as faster delivery or a bundle.
• You are dearer, but your margin is thin: leave it. Not every gap is worth closing, and matching a price you cannot afford is how stores lose money. Our note on whether to match a competitor's price goes through this.
• You are cheaper by a lot: you may be leaving margin on the table. A small increase may go unnoticed.
• A gap appears and disappears: wait for it to persist before reacting.

Make it a routine

Review the report on a fixed day, act on a short list, and write down what you changed. The history will show you whether it worked.