Dynamic pricing examples
So, we’ve seen a definition of dynamic pricing, how about some examples. Dynamic pricing examples can be found in ride-sharing services, airlines, BnBs and hotels, and e-commerce stores. These examples demonstrate how dynamic pricing can be effective in boosting revenue. However, it's important to carefully consider the potential backlash from consumers, and to implement the strategy in a way that maximizes benefits while minimizing the risks.
Dynamic pricing is widespread with ride-sharing services such as Uber and Lyft. In this industry, snowy, rainy, or stormy days and the rush hour dictate the prices (a great example of surge pricing) to get extra benefits from these environmental or time-based conditions. If you’re in a state where it’s often raining (I’m looking at you Portland) you may not see the same swing in pricing (the food delivery industry follows similar practices).
While many people can usually organize their flight a few months in advance, the same cannot be said for many business people, as they often need to reserve flights at the last minute. Because of this, airplane price tickets can change in a matter of minutes.
BnBs and hotels
Prices of Bed and Breakfasts (BnBs) and hotels are correlated with seasons and different holidays, events, and other special days in the year. By using dynamic pricing, this industry can generate more revenue. Planning a vacation somewhere warm during Spring break? Expect the price to skyrocket!
It’s also possible to use scarcity and urgency to squeeze out every dollar.
Many e-commerce stores adjust their prices based on factors, including market price, seasons, competitors, and internal efforts such as the launch of a new collection or the beginning of the outlet season.