Dynamic Pricing on Amazon Accelerates Overall Retail Growth

By Tami Ben-David
Published on January 21, 2015 | 1669 views

Dynamic_Pricing_on_Amazon_Accelerates

As 2015 approaches, no discussion about eCommerce, or about retail in general, can take place without taking into account dynamic repricing.

Specifically with online marketplaces, and particularly on Amazon, dynamic pricing is gaining increasing momentum and has become the way to price items. Without it, the market remains stale, static and unchanging, with retailers struggling to keep up with new market trends and patterns.

The Statistics

Statistics highlight the strength of dynamic pricing in recent years, and we can also see the expected projections over the next couple of years.

Amazon MarketplaceOnline MarketplaceOnline RetailOffline Retail
Market Size (US)$30 billion$80 billion$460 billion$27 trillion
Annual Growth Rate50%25%17%3.7%
Dynamic Pricing Adoption2011-20122013-20142015-20172016-2018

Dynamic Pricing & Offline Retail

Currently, offline retail is the biggest retail market out there, with a size of $27 billion in the US alone. However, its annual growth rate is tiny  at just 3.7%. Dynamic pricing will not be adopted in this market until at least 2016.

Dynamic Pricing & eCommerce

Online retail is slightly better in this respect. Although the market size is lower than offline and currently sits at $460 billion, it is growing at a rate of 17% with dynamic pricing expected to be implemented around 2015.

Dynamic Pricing & eCommerce Marketplaces

The projected growth rate gets higher as we head into the online marketplace sphere. The market size is $80 billion in the US, but having implemented dynamic repricing over the last couple of years, the annual growth rate of online marketplaces is 25%, which is huge.

Dynamic Pricing & Amazon

The Amazon marketplace is the queen of dynamic repricing, and it seems, growth too. As the largest growing online marketplace in the US, the size of the Amazon marketplace is valued at $30 billion with an incredible growth rate of 50% per year. And perhaps this success can be largely attributed to dynamic pricing, which Amazon adopted in 2011.

With prices being changed and updated every 15 minutes, Amazon is currently leading the way in dynamic repricing and its efforts seem to be paying off!

About the Author

A British ex-pat, Tami been writing and content-strategizing for Israeli tech start-ups for the last 5 years. When she's not writing nerdy content, you can find Tami on open water charity swims or traveling to far-flung countries.

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