What is Dynamic Pricing in Retail? Explained

Dynamic pricing is a retail strategy where the prices of products or services are adjusted in real-time based on various factors such as demand, competition, and market conditions. Retailers employing dynamic pricing use algorithms and data analytics to continuously assess and adapt their pricing strategy to optimize revenue and stay competitive. This approach is prevalent in e-commerce, allowing businesses to respond dynamically to changes in customer behavior and market trends. While dynamic pricing can enhance profitability, retailers must balance it carefully to avoid customer dissatisfaction and maintain trust in their pricing integrity.