Dynamic pricing is not new. It’s been around since the 1970s when airlines started to implement it. Fast-forward to the 21st century, and dynamic pricing is a huge trend in eCommerce. More online companies are investing money on programs to have this applied.
Dynamic pricing is a pricing strategy where sellers modify the prices of their products according to demand and supply, plus other factors. For example, if the demand for a backpack is high, an online retailer will raise the price because people are willing to pay more. On the other hand, if the same product is not selling, the price will drop. Before, we talked about how dynamic pricing impacts and benefits retailers, manufacturers, and distributors. Now, it is time to look at how dynamic pricing benefits the other end: the consumers.
1- Plays with supply and demand
Customers are driven by price when they decide to shop online. In Jungle Scout Consumer Trend Report Q2021, low prices are the number one reason for consumers to shop online. So, with supply and demand, products change prices depending on market circumstances. There is where dynamic pricing comes into play. Dynamic pricing involves changing the price of products depending on certain factors. That allows buyers to shop for items at different prices depending on supply and demand. If a product has a lot of demand, the price will likely go up. And the higher the price, the lower the quantity demanded.
2- Creates a healthier market
Dynamic pricing benefits the consumer by having a healthier environment in the market. That is a consequence of having a market with the laws of supply and demand. Sellers cannot raise their prices a bunch because people will not buy from them. They have to do it with consciousness and not abuse the consumer. That allows consumers to face a market where it is complicated to see a presence monopoly or oligopoly.
Conclusion
Dynamic pricing benefits not only retailers and manufacturers but also consumers. As we mentioned above, buyers benefit from it. PriceTweakers helps your company implement dynamic pricing. You have access to more than 30 different price rules, and you can implement them automatically. Also, you can monitor your competitors automatically, saving you time.
