Nearly half of UK marketers (47%) are considering implementing ‘surge pricing’ in the future, utilising AI to dynamically adjust the price of in-demand products.
This finding comes from new data released by customer engagement platform, SAP Emarsys.
The interest in dynamic pricing follows news that the Wendy’s fast-food chain would be testing surge pricing in 2025, although these plans were later dismissed by the company. Despite this, dynamic pricing remains a popular model among airlines, hotels, ticket sites, and ridesharing apps like Uber.
SAP Emarsys’ study, which surveyed over 250 UK marketers, found that 15% are “very likely” to introduce surge pricing into some aspect of their businesses in the future. This push is largely driven by the rise of artificial intelligence, with 21% of marketers already using AI to help set prices. Nearly half (41%) would consider adopting AI for pricing in the future.
Impact on Retail Sector
The data also highlights the potential impact of dynamic pricing on the retail sector. Over half (54%) of marketers in the retail and leisure industries indicated they are ‘likely’ to adopt some form of surge pricing in the future.
Ross Williams, Global Vice President Solution Management at SAP Emarsys, commented, “Surge pricing has proved a controversial topic recently, but the reality is that online retailers and brands have been using some form of dynamic pricing or another for years. Increasingly, consumers are growing used to this type of dynamic approach, knowing that if they book their flights at the right time of year, or their taxi at the right time of day, they’ll get a much better deal.”
Benefits and Challenges of Dynamic Pricing
Williams also noted that dynamic and personalised pricing can be beneficial for retailers, allowing them to reward their best customers and manage high-demand periods effectively. “Dynamic and personalised pricing and promotions can be a great tool for retailers to reward their best customers while also dissuading those who regularly return items – either by incorporating higher prices during peak times, on frequently returned or high-demand products.”
The research underscores the rapid advancements in artificial intelligence and its role in enhancing personalisation. “The main thing to take away from this research is the speed at which artificial intelligence is shaking things up and taking personalisation to the next level. Dynamic pricing used to be a strategy that was only available to the largest retailers with the biggest budgets. Now, AI is making real-time pricing and personalised deals far more accessible for retailers of all sizes,” Williams added.
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