Understanding Dynamic Pricing

Key insights:

• Dynamic pricing is a strategy where prices change in real time based on demand, competition and other factors
• Knowing how and when prices shift can help you understand these changes
• Tools like Citi Shop^SM can help you spot and apply savings during price fluctuations
• Comparing prices and timing your purchases can help you outsmart dynamic pricing

Have you ever held off on buying something only to find the price has changed when you go to check out? You’ve probably experienced dynamic pricing in action.

Dynamic pricing is a strategy that businesses use where prices change in real time based on demand, competition and other factors. It’s used in the retail, travel and event ticket industries to maximize profits, manage inventory or respond to competitors.

By understanding dynamic pricing and using online tools like Citi Shop, you can outsmart those rapidly changing prices.

What is dynamic pricing?

Dynamic pricing, also known as variable or surge pricing, refers to products, services and experiences that shift prices based on supply and demand. For example, a ride-sharing service might price rides differently depending on the weather, a user’s location or the time of day.

How dynamic pricing affects online shopping

You might also experience dynamic pricing while shopping online. Prices can change based on your browsing history or even what device you’re using.

This may result in higher prices, but it can also have benefits. Dynamic pricing allows businesses to provide limited-time offers or flash sales on short notice. You may be surprised when you check out that the price is lower than you might have seen previously. You might also be offered an extra deal or flash sale on another item.

How to shop smart with dynamic pricing

Developing strategies to shop smarter is key when you encounter dynamic pricing.

Track prices: Some search engines allow you to track the price of flights and other products over time, alerting you when prices change.

Set up alerts: You can set up alerts or watchlists on retailers that notify you of price drops. This gives you the chance to jump on the savings before the price rises again.

Shop incognito or clear cookies: Clear your browser’s cookies or consider shopping in private browsing or incognito mode. This can remove trackers that affect personalized pricing, which might result in lower prices.

Use apps and browser extensions to track down deals: Citi Shop can help eligible Citi® cardmembers automatically find and apply coupon codes at thousands of retailers, helping offset sudden price increases or capture discounts during price changes.

Compare prices across sites: Even with dynamic pricing, retailers may not update prices at the same time. If a product seems too expensive, check for offers on competitors’ pages. Look for extensions and apps that aggregate prices from multiple stores.

Keeping these tips in mind can make you a savvier shopper and help you navigate the world of dynamic pricing. 

Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.