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Dynamic pricing that works fine

Dynamic pricing that works fine

In the pricing world, dynamic pricing is a trendy topic right now, and digitalisation provides many great opportunities for increased pricing responsiveness. Get to know the dynamic pricing dos and embrace the undeniable potential of this solution. In which cases you can go dynamic?


Do be dynamic when the inventory is perishable and capacity constraint is clear.

The airline industry is a perfect example here – a fixed number of seats is available on flight and a willingness to pay varies. The early bookers are mostly price-sensitive, while the late bookers tend to be more eager to pay. As a result, airlines commonly offer cheaper prices at the start. They often increase the closer to departure a booking is made. With a finite number of seats on a plane, an airline company can monetise excess demand. Peak travel dates usually have higher prices.


Do be dynamic when your price is fluid and it’s cost-efficient.

With the digital price tags, supermarkets moved to dynamic pricing. Now, able to change prices even 90,000 times a day, the larger stores increase sales and minimise waste. Numerous products have an expiry date which is a key to making it effective. The pricing policies of online retailing obviously didn’t remain unchanged. Now they depend on availability of stock but also the customer’s shopping history data.


Do be dynamic to balance supply and demand.

Dynamic prices can be used in case of two-sided marketplaces. Uber incentivises supply through higher prices in supply-scarce situations and manages to maintain acceptable waiting times for the customers willing to pay a premium. The drivers get paid more per trip. In the meantime, the company generates more revenue.


Do be dynamic in case of seasonal demand.

Amazon successfully employs a dynamic pricing strategy on various products with a seasonal demand, for example these massively bought during Christmas season. These urgent purchases are sold with a higher price to less price-sensitive customers.


Retailers using NetTickIT® have the means to make these pricing strategies possible in-store. To learn more, look at the case studies.