The 6 Types of Dynamic Pricing & How AI Can Improve Them

Dynamic pricing is the practice of optimizing product and service prices according to supply and demand, competition price, or subsidiary product prices. It gained popularity in the 1980s as the airline industry in the US started developing software to adjust flight prices according to departure time, destination, season, etc. which results in 3-10% in profits according to the used module. The rise in popularity led other industries to leverage dynamic pricing, however, different industries use different dynamic pricing types according to their requirements and customers. In this article, we explore the different types of dynamic pricing, how to implement them, and industries benefiting from each type. Segmented pricing, also known as price discrimination, is where businesses set different prices for the same product based on customer data (e.g.