Personalized Dynamic Pricing with RFM Modeling
Pages 35 - 41
Abstract
Dynamic pricing primitives from the airline and hotel industry have lately shifted to the wider electronic retail industry, however there is still a lack of ready to use frameworks for applying or testing dynamic pricing policies in online e-commerce stores. This has practically generated limitations in the way dynamic pricing can be applied in real-life. This paper introduces a new dynamic pricing model that uses an extended version of the RFM model to calculate a personal price for each product sold online. Moreover, our work introduces an open-source simulation framework that allows testing and validation or different dynamic pricing policies. According to our evaluation, the proposed methodology achieved 54.33% increase in net profits when compared with nine other merchants following a fixed pricing policy and 16.13% increase when compared with the derivative-following pricing strategy.
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- Personalized Dynamic Pricing with RFM Modeling
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Published In
June 2021
123 pages
ISBN:9781450376846
DOI:10.1145/3477282
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Published: 17 December 2021
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ICSLT 2021
ICSLT 2021: 2021 7th International Conference on e-Society, e-Learning and e-Technologies
June 10 - 12, 2021
Portsmouth, United Kingdom
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