What Marketing and Operations Teams Need to Know about Dynamic Pricing
Dynamic pricing, proven essential in rideshare and travel industries, allows restaurants to expand market share, improve margins and grow faster.
- Dynamic pricing expands a restaurant's market share by offering a variety of price tiers, attracting different consumer groups and opening up opportunities for growth and innovation.
- Dynamic pricing helps even out sales and improve margins by encouraging customers to order ahead of time and reducing the stress of peak demand periods.
- Adoption of dynamic pricing in the restaurant industry has substantial benefits such as faster access to food and doubling margins, as demonstrated by dynamic pricing fueling billions of revenue at Uber.
How Dynamic Pricing Can Expand Your Restaurant's Market Share
Dynamic pricing can help expand your restaurant's market share. Traditionally, restaurants were limited to certain price tiers, restricting the types of consumers they could attract. With dynamic pricing, however, restaurants can now work within two different price tiers and attract varying groups of consumers depending on the time of day or week. This opens up opportunities for restaurants to expand their market share and capture more of the consumer base.
We are working with marketers to help communicate this to consumers and highlight the benefits of dynamic pricing. For example, dynamic pricing can encourage more orders by offering discounts during specific times. This allows restaurants to be more innovative with their brand and messaging around dynamic pricing. As a result, we expect to see more restaurants embrace dynamic pricing and expand their market share.
How Dynamic Pricing Can Simplify Restaurant Operations
In an ideal world, restaurants would have evenly distributed sales throughout the day and week, and would know exactly how many staff members they need at any hour of the day, which would solve many operational headaches using data. With dynamic pricing, there's no longer a need to deal with a huge lunch rush since it helps even out sales, encourage customers to order ahead of time, and improve margins, ultimately relieving stress.
What Restaurants Can Learn from Uber Surge Pricing
The adoption of dynamic pricing in the restaurant industry offers substantial benefits. One example is the successful implementation of dynamic pricing at Uber by Kevin Novak. This system allowed riders to access their rides faster during peak demand. This same concept can be applied in restaurants, where large swings in demand and slow margins can be addressed by using dynamic pricing to double margins and grow sales rapidly, especially with the help of a digital presence.