How AI-powered dynamic pricing can boost your Shopify sales

If you’re still setting your Shopify store’s prices manually, using spreadsheets or simple rules like cost-plus markups, you’re probably leaving money on the table. Let’s face it: traditional pricing methods just don’t cut it anymore.

Retail moves fast and the way you price your products needs to keep up. Here’s what you're dealing with:

• Quick shifts in demand: A product might blow up on TikTok one day and tank the next. You need a pricing system that can adapt to these fast-moving trends.
• Global competition: Your store isn't just competing with other Shopify stores. It’s competing with Amazon, Google Shopping, and other marketplaces, all of which make price comparison super easy for customers.

Using static pricing means you're missing out on opportunities or accidentally eroding your margins. Prices that worked last week might not work today, and that’s a big problem for your bottom line.

What AI in pricing really means

When we talk about AI pricing, it’s not just about adjusting prices every few minutes based on trends. It’s about using machine learning to make smarter, data-driven decisions that increase both sales and profit, without you having to constantly monitor or adjust everything manually.

Here’s what AI can actually do for you:

1. Detect price sensitivity: AI can analyze how your customers respond to price changes. Over time, it figures out what price will get the most people to buy while keeping your margins high.
2. Predict the right price: Instead of just guessing, AI uses your historical sales data to predict the best price point that will maximize both conversion and profit.
3. Adjust pricing in real-time: No more waiting until the end of the day or week to make pricing changes. AI updates your prices based on real-time data and actual product performance.
4. Run pricing forecasts: Before you launch a new campaign or promotion, AI can model how different price points will perform, so you can be sure you're setting the best price right from the start.

Why using AI-powered pricing is beneficial

Making the switch to AI-powered pricing isn’t just a trend, it’s a smart business move. Here’s a few reasons why:

• Increased margins without risking sales: AI doesn’t just help you raise prices. It helps you raise them in a way that won’t push customers away. It analyzes customer behavior and adjusts prices smartly, so you get the most money from each sale without losing conversions.
• Automation that improves over time: Unlike manual pricing, which can be hit-or-miss, AI gets smarter the more it’s used. It learns from past sales, customer behavior, and competitor prices, constantly adjusting and optimizing for better results. It can learn best prices on product variant level, zone-level, geographical level, and more. 
• Maximized revenue: AI reacts instantly to changes in demand and market conditions. When there’s a surge in interest for your products, it ensures your prices reflect that demand, without you having to manually change a thing.

How to get started with AI-driven pricing

Getting started with AI pricing on Shopify doesn’t need to be complicated. We suggest to ensure checking these to make it work for your store:

• Find an AI pricing tool that integrates with Shopify: Make sure the platform you choose works well with your Shopify store and uses machine learning models to drive smart pricing decisions. 
• Ensure your data is clean: AI relies on data to make decisions. To get the best results, make sure your product data is accurate — this includes details like costs, inventory levels, and current pricing. 
• Start with your best sellers: Focus on your high-traffic or high-margin products first. These are usually the easiest to test with AI, and you'll see the impact on sales and margins quickly.

5 tips for using AI in pricing to boost your sales

Now that you know why AI in pricing is so powerful, here are five tips to help you get the most out of it for your Shopify store:

1. Start by setting the right base price

You can use AI to determine the base price from the get-go. By pulling in information from similar products (whether from you or your competitors), their historical sales data, and even customer reviews, AI can suggest the optimal starting price: one that’s both competitive and profitable for your store. Once your base price is set, AI will continue to monitor and adjust it as needed to keep your margins healthy and sales strong.

2. Take seasonality insights into account

Some products perform better during certain seasons or events - think Christmas decorations, beachwear, or tech gadgets during back-to-school sales. AI can help you identify these patterns in your sales data and adjust prices automatically. 

The cool thing is, AI doesn't just rely on traditional seasons; it can dig deeper into complex trends you might not even be aware of. Whether it's a product variant, color, or unique trend tied to a specific event, AI can detect hidden seasonality, adjust pricing for each product variant, and help you maximize profits during these unexpected peaks or dips.

With AI, you're not just relying on broad, generalized seasonality — you’re getting hyper-targeted pricing adjustments that reflect real-time demand shifts and intricate patterns that you might have missed otherwise.

3. Use price to drive sales when demand changes

Using AI in pricing lets you take advantage of price changes to drive sales at the right moment. For example, if a product starts seeing a spike in demand (maybe due to a viral social media trend), AI can suggest raising the price to capture higher margins while still converting buyers.

On the flip side, if a product is sitting in your store without much action, AI might suggest lowering the price to move it without losing too much profit. 

The best part? These adjustments don’t have to be manual. AI can automate the whole process, so whenever a product fits a specific demand pattern (based on your custom rules or data), the AI makes the price change for you. This means you don’t have to spend time constantly checking prices or reacting to every trend : the tool takes care of the pricing, and you can focus your energy on other parts of your business.

4. Prepare your store for promotions

Running a sale? AI can help you figure out the perfect price for your promotion. Instead of manually setting discounts, AI tools can analyze your product’s historical performance and recommend the best discount to maximize conversions while keeping margins intact.

Once your promotion is live, AI will handle price adjustments across your store, saving you time and making sure everything runs smoothly.

Pro-tip: If you’re running campaigns within the EU, be sure to display the previous lowest price. According to the EU’s Omnibus Directive, you need to show the lowest price in the last 30 days for discounted products. Use the Omnibus Pricing app in Shopify to automatically comply and keep your prices transparent - it’s quick to set up! Download here: Omnibus Pricing in Shopify App Store.

5. Plan for markdowns

Markdowns are a fact of life in retail. Whether you’re clearing out inventory or trying to drive sales during a slow period, AI can help you manage your markdowns effectively.

For example, if you're selling summer apparel, AI can track sales trends and inventory levels. As the season ends or demand slows, it’ll suggest discounts on slow-moving items, ensuring you clear stock while keeping profit in check: it helps you choose when, how and what to mark down.

Conclusion: Make smarter pricing decisions with AI

Pricing isn’t just about setting a price and hoping for the best. With AI, you can make data-driven pricing decisions that adapt to your store’s and customers needs. The best part? It’s automated and gets smarter over time.

By switching to AI-driven pricing, you can:

• Optimize prices based on real-time data
• Automatically adjust prices for demand changes
• Boost margins without sacrificing sales
• Run smarter promotions and markdowns
  
  

If you’re ready to stop guessing and start using data to make smarter pricing decisions, AI is the way to go.

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About:

Elina Kotamäki is a marketing consultant for Pricen, an AI-driven dynamic pricing software for retail and ecommerce. Used in over 32 countries, Pricen helps retailers and e-commerce stores optimize their pricing strategies to boost revenue and margins. Trusted by leading brands such as Motonet, FAM Brands, and ACON, Pricen is revolutionizing how businesses price their products.