Sucka Alert: It’s after 5 p.m., so the price is higher…

Excerpted from the book Pricing Segmentation and Analytics by Bodea and Ferguson

One example of using price segmentation in the price analytics process has been applied at a grocery store chain.

Previous studies have shown that consumers who shop at a grocery store after 5 p.m. on weekdays are generally less price sensitive than consumers who shop on weekdays before 5 p.m.

This finding is intuitive as the consumers who are shopping after 5 p.m. are generally working professionals who are on their way home from work and do not bother to comparison shop, while consumers who shop before 5 p.m. consist of homemakers and retired individuals who, conceivably, are more price conscious and have more time to comparison shop.

To take advantage of this knowledge, there is a grocery store chain in Texas that raises the prices of almost all items after 5 p.m. on weekdays and lowers them again before opening the next morning.

I’m a strong advocate of “dynamic pricing” but this one gives me the creeps … I’d like to be a fly on the wall when customers catch on to the pricing scheme.

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