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Dynamic Pricing And Personalization With AI

Dynamic Pricing is the unique practice introduced for improving the profitability and relative aspects of rapid changes in supply and demand. Dynamic Pricing was initially started as a FICO customer in American Airlines during the 1980s. Now the dynamic pricing becomes one of the most significant marketing disciplines for most of the corporations across the world. Dynamic Pricing strategy has been used in many number of places that include airlines, hotels, entertainment events, and many others. Amazon, the top e-retailer, also uses this option of dynamic pricing for improving the profitability for rapid changes in supply and demand.

Why Is Dynamic Pricing Relevant?

Analyzing the significant financial improvement in the company is quite important for gaining more stability.

  • Need hundreds of OPEX improvements
  • Need additional sales
  • Makes radical changes
  • Conscious about sensitivities of broad customer base
  • Multiple levels of hierarchy
  • Dynamic pricing is unique approaches to quick results in large companies
  • Makes responsible team

Dynamic Pricing is also called the Surge Pricing, real-time pricing, demand pricing, or even algorithmic pricing. This strategy mainly increases the flexible aspects of the demand, competition price, supply, as well as subsidiary product prices. In fact, the Price also changes with the customer based on the purchase of habits. This strategy mainly involves the changes from one customer to another based on all purchase habits. With the use of the specialized strategy, Dynamic pricing offers the suppliers to be much more adjustable and flexible on pricing.

AI And ML:

With the advancement in technology, Artificial Intelligence (AI) and Machine Learning (ML) becomes one of the most amazing ways with data expansion. Dynamic pricing goes beyond traditional inventory management functions. It also mainly enables delivering optimal customer experiences based on the natural scenario. Pricing also becomes one of the most amazing options for offering continuous adjustment on consumer behavior as well as preference for the organization inventory. Most of the businesses have been using the rich data sets along with the high-end pricing models. With machine learning techniques and advanced analytics, it is quite a convenient option for producing better pricing alternatives with Stock Keeping Units (SKUs). It is a mainly suitable option for the consumer dynamically, along with the point of engagement. Competitor price monitoring is considered an effective analysis of the external and internal variables prices for optimizing the strategy.

  • Supply
  • Stock levels
  • Current cost
  • Future cost predictions
  • Demand
  • Product page views in e-commerce platforms
  • Seasonality of products
  • Data about the specific customer
  • Demographic data
  • Competition’s prices

Why Choose Dynamic Pricing?

Dynamic Pricing is considered as the most effective profitability option. For example, a 1% increase in the price would result in about a 10% improvement in the profit. It also deals with the 10% profit margin, so they have been useful for gaining a better solution. Machine Learning is mainly based on dynamic pricing systems for getting better advantages.

  • Faster response to demand fluctuations
  • Positive impact on Revenue
  • More precise
  • Price changes take with account more factors
  • SKU level prices
  • Long term increases in profits or sales
  • Dynamic Pricing Generates with other pricing strategies.


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