To do this, Google makes use of a metric called Current Benchmark Price which is a click-weighted average price of any given product. That means any product which has received more clicks will have a bigger impact on the final benchmark price.
What is a Benchmark Price?
Benchmark Pricing is the average price of your products among other sellers. The price competitive report on Google Merchant Center shows if your product falls below the current price benchmark (which means you’re beating competition), or if it’s above the benchmark (which means being outpriced), or if you’re just at the benchmark.
Now, how does Google identify the benchmark price of your product?
For instance, if two sellers offered the same product, one at $10 and the other at $15, but the first product received 10 clicks and the second received only 5 clicks. The current benchmark price would be roughly $11.75.
This is calculated using the formula:
(Product 1 Price x Product 1 clicks) + (Product 2 Price x Product 2 clicks)
(Product 1 clicks + Product 2 clicks)
The formula itself is not really important, but the current benchmark price is, and the data shown on this report will give you a clear understanding of where your pricing scheme is positioned in the overall market.
You need to remember that it’s not a good sign if your products that do have a benchmark are above the benchmark pricing, and it’s something that should be investigated immediately.
How to Access the Price Competitiveness Report in Google Merchant Center
To find this important report in your Google Merchant Center account, you need only follow a few simple steps. The first of which is to open up your GMC account.
After, then you'll need to navigate to the tab which is marked Growth, and then click on Price Competitiveness. This will give you direct access to the report, so you can begin gaining insights into pricing and make better decisions about your own pricing schedule.
If you don’t see this report in your account, it means you still need to enable Market Insights using your administrator account. To do this, go to Google Merchant Center dashboard, click on Growth, then Manage Programs.
If the Market Insights is not enabled, you will see the “Get started” option. Click on that to enable this feature. You should now have access to both the Price Competitiveness Report and the Best Sellers report.
How to Use the Price Competitiveness Report
One of the most valuable features of the Pricing Competitiveness report is that it is capable of showing trends over time. It can be set up to use a date filter which effectively includes information for day-to-day trends, which is extremely useful in identifying emerging patterns.
Any time period you wish to evaluate can be included by using the date filter, and that will allow you to drill down into specific periods of time to show activity for that time frame.
You can also group products by category, brand, or product type to get a better understanding of how your product is performing compared to other similar products.
For example, if a particular category in your Google Shopping campaign isn’t performing well, you can group your products by campaign.
Filter Price Comparisons
The Google Merchant Center Price Competitiveness report provides you with some important comparisons between your prices and those offered by the competition, for the same types of products.
This can be very useful information, because it tells you where you are positioned with regard to pricing in your market. If your asking price is significantly above your competitors, that may be a big reason why you're not selling the quantities that you had hoped for.
When comparing pricing, I recommend looking at the “Total Price” instead of the “Item Price.” This is a better way to interpret the report because the Total Price includes the shipping and sales tax, which provides a more accurate final price.
The Price Competitiveness report is an easy-to-use report which will give you an instant view of how your product pricing stacks up against the competition. When you know this, it will put you in a better position to make good decisions about future pricing, and whether or not you need to make any adjustments to your current pricing scheme. It will allow you to adjust your bids on products which are very competitive in Shopping Ads, and you'll know how competitive you are in Shopping Ads over any period of time.