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Created on 26.02.2019

How dynamic pricing works

Applying the same prices for everyone has long since been a thing of the past. Taxi journeys are less expensive around 7 p.m. than at 8 p.m. On Tuesdays, you can buy headphones online for CHF 30, whereas they cost CHF 40 on Wednesdays from the same shop. The technical term for this phenomenon is dynamic pricing.

It’s used to reconcile demand and availability. This is an attractive option for online retailers in particular. It allows them to structure their pricing dynamically using data analysis. The prices on Amazon, for example, change around 2.5 million times a day. SMEs can also use dynamic pricing to personalize prices for their customers. However, this can also annoy customers. This means you need to reflect carefully on whether a dynamic pricing strategy is well suited to your company.

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