Dynamic Pricing

Dynamic Pricing

Dynamic pricing, also called real-time pricing, is an approach to setting the cost for a product or service that is highly flexible. The goal of dynamic pricing is to allow a company that sells goods or services over the Internet to adjust prices on the fly in response to market demands. Changes are controlled by pricing bots, which are software agents that gather data and use algorithms to adjust pricing according to business rules. Typically, the business rules take into account such things as the time of day, day of the week, level of demand and competitors' pricing. With the advent of big data and big data analytics, business rules can be crafted to adjust prices for specific customers based on criteria such as the customer's zip code, how often the customer has made purchases in the past and how much the customer typically spends.