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Are stable prices soon to be a thing of the past?

Anybody who buys online – whether at home or on the move – is familiar with the phenomenon: prices in online shops change frequently, in some cases drastically. Online retailers use this technique as specifically as possible, i.e. ideally on a personalised basis, to exploit their customers’ willingness to buy.

01.06.2016

At the same time, product prices are based on a range of factors: Do I shop from my mobile phone or a tablet? Mobile shoppers pay more with some retailers. Which platform do I use? Apple users are more willing to spend than Android users. The time of day at which you shop also plays a role: prices rise at peak times, such as just after lunch and in the evening.

But shop-based retailers are also experimenting with dynamic prices. A few years ago, the French DIY store chain Castorama carried out a pilot project with price tags which could be changed at will; depending on the time of day and footfall, prices were cut, with the aim of encouraging customers to visit the shop if footfall was low.

In the Netherlands, the fast-food giant Burger King started a trial involving flexible prices a year ago. A restaurant announced special offers via a free app depending on the time of day and the number of customers. Regular customers received cut-price offers. By contrast, the Canadian fashion chain Mark’s linked discounts for winter clothing to the temperature outside: prices fell by 1% for each degree below zero; digital advertising billboards at bus-stops showed the current discounts.

Dynamic prices of this kind among retailers are still limited to test runs. But with the increasing dissemination of beacons, customer loyalty programmes and ever more targets approaches to customers across several channels, retailers will have far more scope in future to make their customers personalised offers.

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If you would like to learn more about the future of pricing, get in touch with Cornelius Patscha.

Contact Cornelius Patscha

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