PUBLISHED ON 2019-02-13
The idea of dynamic prices is very simple and at the same time profitable: adapt prices to demand.
What is Dynamic Pricing
The prices of an e-commerce are dynamic when they automatically vary according to a series of factors such as inventory, seasonality or particular periods of the year. Other indicators often used to update prices are the number of visits and, above all, the prices of the competition.
Dynamic pricing strategies are nothing new: the first striking examples date back to the 1980s in the airline industry. These companies had IT structures that allowed them to operate dynamic pricing techniques already in those years. Another example in more recent times is the one of Wallmart which has managed to change its prices up to 40,000 times a month.
Dynamic pricing strategy therefore responds to market demands, changing the prices of products to maximise both sales and profits.
The importance of Dynamic Pricing
Two new aspects that have become increasingly important over time are real time and competitiveness.
Evaluating demand in order to offer the most competitive prices on the market requires timely intervention and dynamic support for monitoring competitive prices is therefore necessary. In this context, a product like PricePaladin is a key tool.
The importance of dynamically updating the price is increasingly evident when you consider that on average 8 out of 10 buyers who buy online check an average of 4 ecommerce before making a purchase and has also been detected an increase in users who maintain active monitoring to different platforms. It follows that one of the classic approaches followed by online sellers, namely to set prices without then reviewing them over time, is essentially a risky and harmful approach.
A dynamic pricing strategy must monitor the prices of our competitors to create a competitive offer that attracts the users. Price monitoring tools such as PricePaladin offer the necessary help to react in real time to price changes of competitors.
The price analyses that result from the monitoring of competitors are not only useful techniques for large brands such as Amazon and Best Buy that notoriously update their prices dynamically even a few dozen times a day, but can also be a very useful tool for small-medium businesses and small businesses that can thus better position themselves in the market and promptly manage price changes.
Dynamic pricing supported by the most advanced technology can make you constantly competitive and help you face the daily challenges of the competition by giving you an advantage over it. increase-sales-with-loyal-customers