You must have come across the term fixed price while shopping on some store or in the market regularly and this term is not very hard to understand and we all know that the fixed price tag indicates that the rates in that particular store are non-negotiable and we have to accept them as they are.
The dynamic pricing is something opposite to this way as the name implies. This pricing strategy changes over time and with every situation. The change in the pricing can vary due to the peer pressure, amount of competition on the product in the market, the moods and shopping attitudes of the customers and last but not the least on some special occasions taking place in the area.
All these factors when combined together or in their individual effect are responsible for the changes appearing in the prices. The dynamic prices play a vital role in grabbing the customers for the retailer and makes thing go in their favor as well.
Here let us have a look at the advantages of the dynamic pricing.
- The dynamic pricing helps you get the benefit of the prices for each of the individual product. If in some particular time, the demand of your product is getting low, you can even lower the prices and announce the sale. For some other season if the demand of your product is getting higher, you can increase the price and generate the revenue easily. For example you can sell a Christmas tree at a lower price in June as compared to its price in the month of December when everyone has to buy the tree anyways.
- The dynamic pricing scheme also helps you get on the top of your competitors as you are the one who is giving the customers what they want and the change in your product prices is based on the change in the mood of customers, therefore the customers too will stay connected to you just to know when you are announcing the new prices so they can avail them too.
- The dynamic pricing in retail also helps you in the sales and discounts so if you want to get maximum out of the dynamic pricing, you can couple it along with the sales and discounts. This will generate more benefit for you and the more you will advertise your sales, the more customers will come to you and consequently you will get more profit.
The dynamic pricing involves risks as well so you need to have the up to date technology to make sure that you are making the most out of it. The software that generates the dynamic pricing has to consider all the above mentioned factors as well to generate the price that will suit you and that will bring more people to buy your product. So you have to set very realistic goals to make sure that you are making the best out of these dynamic pricing.