Dynamic pricing is a pricing strategy that involves constantly adjusting prices in real time, according to the characteristics and needs of individual customers and situations. This method uses algorithms and big data to optimize prices.
Online retailers often use dynamic pricing, changing prices based on demand levels, inventory availability, competitor prices, time of day, or even user behavior (e.g., browsing history). While it maximizes revenue, it requires careful ethical management to avoid creating a sense of unfairness among customers.
