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Dynamic pricing is close to approaching ‘buzzword’ status, which means that enough retailers are at least entertaining the thought. But what does dynamic pricing even mean? Pricing is self explanatory, but could you define dynamic without using another buzzword? Well, dynamic pricing is a strategy involving always active or changing prices adopted by some of the leading online retailers. Here’s the lowdown on the pricing of the FUTURE…
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READYTAKE OFF
FOR Why Dynamic Pricingis a MUST forEcommerce
WHY DYNAMIC PRICING WORKS
WHY AUTOMATION IS SO IMPORTANT
NOTABLE RETAILERS THAT ARE USING DYNAMIC PRICING (And What They Are Accomplishing With It!)
AMAZON
WALMART
BEST BUY
TOP DYNAMIC PRICING STRATEGIES FOR RETAILERS
Having tiered pricing (from value products to premium) can target different customer segments at the price point they are willing to pay.
Segmented PricingIncrease prices when demand is high (or when competitors run out of stock) to maximize profit and lower prices when demand is low.
Peak Pricing
Change prices based on the time of day and how long they have been on the market.
Time-based Pricing
Dynamic pricing works because it allows businesses to remain competitive with 24/7 price monitoring and changes. This can boost profit by 25% on average.
Think about it: Price decreases can boost lagging sales, and price increases when competitors stock is low can bump up profits
It Just Makes Cents 24/7 Coverage
of retailers will beusing pricingintelligence software
22%are currently usingpricing intelligencesoftware, in 2013
plan to be usingit in the next 6months
7% 36%will start in thenext year
65%
DEMAND
PRICES$ $$$$
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Pr i c i n g Pe r fe c te d.
SourcesForrester, Fortune, Internet Retailer, Wall Street Journal
Are you getting left behind in the dust?Implement a dynamic pricing strategy to get up to speed.
BOOST PROFITS BY 25%
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$44 billion in sales in 201327% sales increase from 2012-2013Price changes every 10 min, on avg.
A Top 10 US Retailer
SEARS
Repriced 25% of products dailyfor the holidays in 2012
17% sales increase in eCommerce sales
50,000 price changes monthly
Online sales grew 30% in 2013
Wal-Mart’s growth topped Amazon’s
eCommerce makes up 13% of total salesOnline sales grew 25% in 2013 and 20% in 2014
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PROFIT
PRICE POINT
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Introducing new products can be tricky and that’s where analytics comes in. Keep pricing flexible and monitor demand based on slightly different price points.
Penetration Pricing
RETAILERS CURRENTLY USING PRICING INTELLIGENCE SOFTWARE:
Forrester Research estimates that price optimization software improves gross margins by 10%
It reduces costs of finding the optimal price for an extended amount of time
No human can scan Amazon for thousands of products every 10 minutes, but software can!
$67 $68$66
BY NOVEMBER 2014:
