Did you know that Tesla's dynamic pricing model led the company to make five significant price adjustments across all of its products (S-3-X-Y) in the first three months of this year? And, increasingly, retail brands are adopting similar pricing optimization models to provide value to customers in an uncertain economy. Basically, it's an active process wherein merchants have a constant understanding of how their prices stack up against the competition and adjust accordingly to best optimize the balance between a good sales margin and a healthy sales volume.
Where to start? Use AI software & tools to highlight daily price fluctuations in your segment - if you spot all of your competitors increasing prices on a certain product, that’s probably a good indicator for you to follow suit. But there's also a chance that by tracking competitor pricing, you'll lose sight of profitability and compete in “a race to the bottom.”
Read the full pros and cons of dynamic pricing here