Dynamic pricing is the automatic adjustment of selling prices based on rules – according to competitors' prices, stock levels, demand or the period. It is used mainly for ranges with high price comparability. The benefit is a faster reaction to the market without manual work; the risk is a price spiral, where several stores keep undercutting one another and margin falls for everyone. A lower limit is therefore set based on margin, not on the competitor's price, and the rules are restricted to selected categories. A separate topic is personalising the price according to the behaviour of a specific visitor, which requires informing the customer and is viewed sensitively. For promotional prices, the rules on stating the previous lowest price also apply and must be respected by the system.
See also: Competitor price monitoring, Margin and discount promotions, Unfair commercial practices.
