With the help of a dynamic pricing strategy, businesses can incentivise customers to shop during off-seasons by offering lower prices. In addition, when your products have a high inventory, a gradual price reduction helps prevent overstocking and stimulates more sales. Optimised inventory turnoverīy tracking your competitors’ campaigns and inventory, you can adjust your prices to reflect current demand and optimise your own inventory turnover. Conversely, when availability is higher than demand, it is wise to decrease the price to meet the demand.Īs with everything else in business life, dynamic pricing also comes with its perks and drawbacks. When demand exceeds availability, there is room to increase the price as there are fewer products available than demand is. This approach is called cross elasticity of demand. It also allows you to calculate which competitor prices really affect your demand. In addition, this dynamic approach to pricing generates better insights into market trends and customer behaviour by identifying the most selling items, the most significant competitors and their prices, and the best profitable price. In addition, it enables faster and more profitable sales, provides more control over product pricing and makes it possible to change prices in real-time and immediately observe results. Dynamic pricing helps your business to thrive in the competition between you and your competitors as it allows you to dynamically react to market changes and offer the best possible value for your customers. electronic self-labels) allow businesses to take advantage of more predictable and consistent pricing strategies. The rise of online shopping and new technologies (e.g.
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