Dynamic pricing
Also called: demand pricing, surge pricing or dynamic pricing policy
In dynamic pricing, companies and stores continuously adjust their prices in order to optimize both margin and probability of sale. In this pricing strategy, stores look for the price consumers are willing to pay at a specific time.
There are retail chains where the price of items is adjusted up to several times a day. Many times these changes happen automatically, based on algorithms and collected data.
Pricing factors
Dynamic pricing takes into account, among other things, the competitor's price, the time of day or day of the week, demand and inventory. Prices charged by competitors are constantly monitored, including through spiders that monitor Web shops. But more abstract factors such as weather can also play a role in determining the best price.
To easily adjust product prices, more and more stores are equipping their shelves with electronic price tags. The price shown in the display of these can easily be changed (often remotely).
When the price of items is adjusted according to the customer 's profile (such as gender or behavior such as browsing history) this is also called personal prizing.
