Dynamic pricing is the practice of changing prices in response to factors such as demand, stock levels, time of day, competitor prices or product shelf life. Airlines and online retailers have used it for years, and it is becoming practical in physical stores.
Rules or algorithms in the pricing software decide when and how prices should move, and the new price is published to the POS, website and shelf at the same time. Electronic shelf labels make in-store updates instant instead of requiring staff to reprint tickets.
Retailers use it to clear short-dated stock, run happy hours and flash sales, match local pricing and respond quickly to cost changes. Done well it protects margin and reduces waste.
Consumer trust matters, so keep rules transparent and consistent, and comply with consumer law on price display. The shelf price must always match the price charged at the till.