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Demand Shaping is a powerful concept to prevent stockouts and surplus inventory.
Agile supply chains match supplies to demand on an ongoing basis, unless there are unforeseen supply issues. Instances of mismatch are quite few.
However, companies with lower levels of agility often face the issue of mismatch, resulting in either potential stockouts or surplus inventory.
Demand Shaping helps in minimizing this mismatch by adjusting pricing well in time, so that demand is shaped in time for the available supplies. For example, in case of a potential stockout, discounts are reduced to curtail demand. Similarly, excess inventory can trigger additional discounts, within the guard rails specified by the company.
It works only for the products which have significant price elasticity.
A few companies use it well. However, many companies act on only surplus inventory, not on the potential stockouts, thereby missing out on additional profit opportunity.