In the world of e-commerce, dynamic pricing is a powerful tool for retailers and brands alike. The power to adjust prices quickly and on a large scale secures your place in the competition and increases sales and profitability.

The perfect price: hard to pin down

Finding that elusive price might be hard, but try reaching your maximum potential without it. And as if pinning down the best price for your products in the opaque e-commerce market weren’t enough, keeping it at the right level in perpetuity is another matter entirely. The number of platforms is skyrocketing, D2C is gaining in importance, brands and retailers have to avoid alienating one another, and the competition somehow always seems to get in that better offer.

Automated price adjustments: use cases and opportunities

Price wars

With competitors constantly lowering their prices to attract customers, this has become a major challenge for e-commerce companies. Because while retailers need to counter pricing pressure, manufacturers see low prices as a threat to their brand. Dynamic pricing based on a clear pricing strategy helps companies respond quickly to price changes and maintain a competitive edge. Interestingly, this actually involves adjusting prices upward as well as downward. Upward adjustments can help prevent a downward price spiral, thereby practicing price hygiene and maximizing profitability.

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Seasonality and sales phases

The time of year has a big impact on consumers for a whole range of products. Similarly, sales events like Cyber Week with Black Friday or the winter holidays are big business for sellers. All this adds to the pressure to position yourself in the market with the best offer in order to generate as much revenue as possible with good margins. This is where dynamic pricing comes in, optimizing pricing for these phases and automatically adjusting to seasonal demand. And it gets better: you can even leverage historical data to preemptively optimize your pricing strategy for future phases.

Fluctuating demand

Alongside the time of year and major sale events, online demand for specific products can also fluctuate dramatically with current events or consumer trends. Dynamic pricing helps companies adjust their prices in real time to meet changing demand and markets. So ensure you price your products optimally to maximize sales.

Responding to changes in availability and delivery times

If your product inventory – or your competitors’ – is particularly high or low, it can make sense to raise or reduce your sale prices accordingly. The same is true of delivery times: if the competition can’t offer a product or can only offer it with long delivery times, you can increase your prices to exploit the market potential. With dynamic pricing, you can incorporate this data into your pricing strategy and respond automatically to avoid losing a single second of potential. Plus, it’ll also help in counteracting excessive inventory pressure before it’s too late.

Leveraging sales channel momentum

Choosing the right sales channels plays a vital role in initial purchase pricing. But, you have to know your platforms inside out. After all, every channel has its own dynamics, which can play into your hands, or can cause enormous harm. Which environment opens the best doors? Where can you achieve the best margins in the long term?

Dynamic pricing optimally adjusts the price to the target group and the competitive environment of a specific channel. This way, you can target individual sales channels for maximum profitability.

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High margins? You’d better have high-frequency price changes

So many factors influence pricing: material costs fluctuate, purchase prices change, inventories, inflation, demands, trends… The list is endless, the market constantly in motion, and this has a direct impact on price. And quickly! Ignore this or lose track of the ever-growing quantities of items and options, and you’ve already missed out on maximizing those margins.

Strategizing scarce resources

Even if you could afford the people to keep up manually with the sheer speed of market dynamics, you might struggle to find them. Skilled labor is in short supply, and digital commerce is no different. Quite sensibly, and profitably, manufacturers and retailers are reserving scarce company resources for more strategic projects.

Opening doors with automation and AI

Automated price monitoring gives you the chance to collect market prices for your products quickly, easily, globally and on all relevant sales channels. And not just once, but time and again, even at high frequency. Never standardized, but highly specific and individual to your requirements. All this, with AI precision in recognizing your products and competitors.

So why not analyze this price data and put it to good use with dynamic pricing. You’ll only free up resources for strategic projects and avoid tying up precious team players in tedious donkeywork…