It’s normal for the prices of things to change over time but not constant basis. However, technology enables fast changing prices in many areas.
This creates a win for customer and suppliers by matching supply-and-demand. The business increases profit whilst reducing waste and optimising efficiencies.
Many of us have experienced dynamic pricing when booking air-tickets. It’s not uncommon to have a choice of different prices and to find that the cost has changed when we return to the site a few minutes later.
You may not know, but airlines track your internet address and use that to nudge prices at the key moment in the booking process.
What is not as known is the way Amazon use dynamic pricing. The change prices more than 2.5 million times a day. Wal-Mart can, by comparison, currently only change the price of 50,000 products per month.
If you’re a Mac users you may be see higher prices than a PC user. Amazon also tracks your behaviour to work out when to change the price to get the sale, and prices are impacted by what else is already in your shopping basket.
Companies are providing Dynamic Pricing solutions; an example is Qcue who specialise in sports and entertainment events. Rather than a set price, ticket prices are adjusted in real-time based on demand.
In San Francisco, parking charges are changed in real-time to have 20% to 30% of spaces free.
Think about how you could use Dynamic Pricing to increase profits and improve your offering.
Image from Flickr by Paul Mison.