Dynamic Pricing is the proven “corner store” principle – rethought for the digital age.
Small corner stores always used a somewhat volatile pricing policy based on experience and gut feeling. For example, close to closing, they generally offered bread or fresh products at a discount in order for the retailer to sell out. But at least three things have changed massively since then:
- he scale of assortments in combination with the complexity of influencing factors that have to be taken into account for the pricing process.
- The level of price transparency has risen enormously, as customers are now able to compare every product price, at any time, online.
- The speed of market and demand changes has never been as fast as it is now.
Dynamic Pricing enables you as a retailer to react to these massive changes quickly and effectively. Through algorithmically optimized pricing, you are able to establish market-driven prices based on supply and demand, guarantee sustainable price changes and avoid disastrous price spirals and price distortions.
Dynamic Pricing – aka dynamic price optimization – means that you can regularly adjust product prices to correspond to the current market and current demand. AI-driven software observes all contextual conditions that are relevant for the market environment and for a retailer’s entire product range. It allows you to include factors such as demand for each of item, your current stock levels and competitor approach into consideration.
Then, based on the findings and established business goals and pricing parameters, such as margin, sales, market control and more, the AI software delivers optimized price recommendations, and executes price changes, automatically or semi-automatically. If you would like to see Dynamic Pricing in action, reach out to us for a demo.
