Dynamic Pricing

Dynamic Pricing – also known as dynamic pricing strategy – refers to a pricing strategy where prices for products or services adjust in real time based on supply, demand, user behavior, or market conditions. The goal is to set the optimal price at any given moment to maximize revenue or improve utilization.

This method is especially common in E-Commerce, the travel and events sector, as well as on online marketplaces. Prices here sometimes change multiple times daily, depending on factors such as inventory, time of day, competitor prices, the user's device, or previous interactions (e.g., shopping cart abandonments).

A classic example: An airline dynamically adjusts ticket prices – the closer the departure date and the fewer seats available, the higher the price rises. Dynamic Pricing works similarly for hotels, streaming subscriptions, or online retailers like Amazon.

Advantages of this strategy include, among others, better adaptation to market conditions, higher margins during high demand, and targeted price control to boost sales. At the same time, targeted discounts can encourage users with a high purchase probability to convert via conversion.

However, dynamic pricing requires a high level of technological support – such as AI-based algorithms, real-time tracking, and automated price adjustment systems. Transparency is also important: If users feel they are being treated unfairly, trust in the brand can decline.

For companies that want to respond quickly to market changes, Dynamic Pricing offers a powerful, data-driven way to make their pricing strategy flexible and effective.