No Need To Change Existing Systems,
Service Providers, Or Institutions
Dynamic Pricing
Global Customer Insights In Real-Time
Dynamic Pricing
Feature Overview
How The Dynamic Pricing Feature
Can Bring Value To Your Global Organization
INSTANT® Dynamic Pricing is a pivotal capability, enabling a company to adjust prices in real-time based on market demand, competitor pricing, inventory levels, and customer behavior. Examining the features of Dynamic Pricing illustrates how this capability optimizes revenue and enhances competitiveness, quantifying the benefits in terms of savings or efficiency improvements.
Dynamic Pricing Capabilities Breakdown
Feature Description: Utilizes real-time data analytics to sense shifts in market demand for products or services, allowing prices to be adjusted dynamically to match demand levels.
Benefit and Savings: By aligning prices with current market demand, a company can increase sales volumes during high-demand periods by up to 20%, optimizing revenue and ensuring market competitiveness. This real-time responsiveness can also lead to a 10% reduction in lost sales due to pricing mismatches.
Competitor Price Monitoring
Feature Description: Continuously tracks competitor pricing strategies and market positioning, enabling a company to adjust its prices to stay competitive or to capitalize on opportunities where competitors are priced higher.
Benefit and Savings: Staying ahead or in line with competitors can improve market share in the range of 15%, as pricing is always positioned optimally to attract customers. This capability can also preven
Customer Behavior Analysis
Feature Description: Analyzes customer purchase history, price sensitivity, and engagement to tailor prices at an individual or segment level, maximizing the likelihood of purchase.
Benefit and Savings: Personalized pricing based on customer behavior can increase conversion rates by approximately 25%, directly enhancing revenue and customer satisfaction. This approach also helps in retaining price-sensitive customers, reducing churn by up to 5%.
Inventory Level Adjustments
Feature Description: Integrates inventory data to adjust pricing strategies based on current stock levels, encouraging sales of overstocked items through price reductions, and protecting stock of high-demand items through premium pricing.
Benefit and Savings: Efficient inventory management through pricing can reduce carrying costs in the range of 20% and decrease markdowns and waste, particularly for perishable or seasonal items, improving gross margins by approximately 10%.
Time-based Pricing
Feature Description: Implements pricing adjustments based on time-specific factors, such as higher prices during peak demand periods or special promotions during off-peak times to stimulate demand.
Benefit and Savings: Time-based pricing can enhance sales during peak periods by up to 20%, maximizing revenue when demand is highest. During off-peak times, stimulated demand can increase occupancy or utilization rates by approximately 15%, ensuring steady revenue streams.
Algorithmic Pricing Optimization
Feature Description: Employs advanced algorithms to automatically adjust prices across products and services, considering multiple factors simultaneously to find the optimal price point for revenue maximization.
Benefit and Savings: Algorithmic optimization can improve overall revenue by approximately 5-15% through more accurate and responsive pricing strategies. This efficiency reduces the need for manual intervention and ensures prices are always set to maximize profit margins.
Dynamic Pricing
Optimize Your Pricing Model
Dynamic Business
Market conditions and business dynamics are constantly changing. Dynamic (or “real-time”) pricing leverages data from a variety of sources to price items more intelligently. This strategy requires that all channels reflect the most current pricing – on a consistent basis – as calculated (or optimized) using several inputs.
What is Dynamic Pricing?
Dynamic pricing, also called “demand-based” (or “time-based”) pricing, sets flexible prices for products or services based on current market conditions. For example, businesses might change prices based on algorithms that consider factors such as competitor pricing, real-time supply/demand, and other external market forces.
Where is Dynamic Pricing Used?
Dynamic pricing is currently used widely in several industries, most notably the airline and hotel sectors. For example, airline seat pricing often changes daily – based on market conditions. So, too, does the price of hotel rooms.
Increasingly, other industries have noticed this trend and are beginning to add dynamic pricing to their business strategies. However, each sector takes a slightly different approach, based on individual needs and the nature of supply/demand characteristics for its product(s).
Companies that execute dynamic pricing strategies also need to manage their inventory more actively. The reward for this increased flexibility should be higher sales, better gross margins, and increased shareholder (as well as stakeholder) value.
Retail is likely the next frontier in dynamic pricing. With the continued growth in e-commerce, retailers are increasingly depending on software to make pricing updates – and to track the implications of those price changes.
However, this revolution won’t be limited to one category (such as Retail). Even traditional (brick-and-mortar) businesses can benefit from dynamic pricing, using strategies such as electronic shelf labels (ESLs).
