When it comes to tech that makes a business really competitive online, dynamic pricing is the new gold standard. If you sell anything on the internet, this data-driven tool can ensure you beat your competitors every time. It is hailed as a game-changer for a reason.
The digital transformation process can be bewildering for those new to ecommerce. With so many features to choose from, what makes this price optimisation tool so special?
Here, we will answer common questions to give you an overview of what dynamic pricing is and how it works.
What are the benefits of dynamic pricing?
It makes your products more visible online by setting a price that reflects market trends and stock availability. It also drives traffic to your website and can increase sales by between 10* and 25 per cent. This tool also saves you time. You won’t have to compare or change prices yourself, or rely solely on bulk updates from suppliers.
How does it work?
Dynamic pricing automatically varies prices on your website to reflect market conditions and stock levels. It works through integrations with suppliers and data providers – in real time. It takes into account your costs, your competitors’ prices and markets. When demand rises for a product, the price will increase. This boosts profit margins at the time when buyers are prepared to pay more. To help you shift slow-moving stock, prices will decrease when demand is low.
Will a product ever sell at a loss?
Dynamic pricing puts you in control. You can set a floor price so that you never unwittingly lose money.
What types of business can use dynamic pricing?
B2C and B2B.
Do all ecommerce platforms offer dynamic pricing?
No. If you want to use dynamic pricing, you will have to find either a platform or developer offering this smart tech.
Are there any disadvantages?
Changing prices need careful management. If you use dynamic pricing for everything, you should make it clear on your website that prices are updated daily.
* Forrester
This free fact sheet is prepared by East Devon News.co.uk for East Devon businesses.
If you are interested in customer segmentation in the context of automated marketing, let Belinda know and she will add it to her list of requested features / fact sheets.
