Dynamic pricing involves automatically and frequently adjusting prices based on various internal parameters (such as stock levels or availability) and external parameters (such as demand or competition). This practice, already present in sectors like transportation and hospitality, has become widespread with the rise of e-commerce. Pricing algorithms have facilitated the implementation of this strategy, enabling real-time price changes. Companies like Amazon have popularized this approach by changing millions of prices every day.
The evolution of marketplaces and price comparison websites has also contributed to the rise of dynamic pricing. Companies like Sarenza adjust their prices daily based on stock levels to optimize their sales strategy. This model could also develop in physical stores thanks to electronic shelf labels, thus facilitating rapid price adjustments.
Dynamic pricing encompasses various combined practices, such as price adjustments based on available stock, “Uber-style” pricing, and real-time adjustments based on customer data analysis. Despite its advantages, dynamic pricing can present challenges in terms of perception, consistency across visits and sales channels, and even legal issues.
A concrete example of dynamic pricing is price variation based on product expiration dates.