Archive for the ‘Dynamic pricing’ Category

Alert: Mickey is reaching for your wallet …

October 12, 2015

I’m conflicted on this one.

On one hand, I teach pricing strategy in some of my courses.

The explicit strategic goal: increase revenue and profits with aggressive pricing tactics.

On the other hand, I always feel sorry for “average” parents who get creamed financially when they take their kids to a ball game or amusement park.

 

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Based on recent announcements, Disney – Mickey’s parent company – is rolling some pricing tactics to fatten Mickey’s wallet and flatten your’s …

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Gotcha: Your willingness-to-pay is showing …

December 18, 2014

Punch line: Major retailers are customizing online prices for each user, using users’ information (such as location) to determine different prices for identical items. The goal: higher price realization and higher profits. 

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Gotcha: Your willingness-to-pay is showing …

December 18, 2013

Punch line: Major retailers are customizing online prices for each user, using users’ information (such as location) to determine different prices for identical items. The goal”higher price realization and higher profits.

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Excerpted from WSJ’s, “Websites Vary Prices, Deals Based On Users’ Information”

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It was the same Swingline stapler, on the same Staples.com website.

But for Kim Wamble, the price was $15.79, while the price on Trude Frizzell’s screen, just a few miles away, was $14.29. 

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Gotcha: Your willingness-to-pay is showing …

January 17, 2013

Punch line: Major retailers are customizing online prices for each user, using users’ information (such as location) to determine different prices for identical items. The goal”higher price realization and higher profits.

* * * * *
Excerpted from WSJ’s, “Websites Vary Prices, Deals Based On Users’ Information”

BLOG

It was the same Swingline stapler, on the same Staples.com website.

But for Kim Wamble, the price was $15.79, while the price on Trude Frizzell’s screen, just a few miles away, was $14.29. 

(more…)

Gotcha: Hosed by “dynamic pricing”

December 26, 2012

In a prior post My computer’s algorithms tell me that you’re willing to pay higher prices we reported that online retailers were using software that helps them detect shoppers who can afford to pay more or are in a hurry to buy … and, present pricier options to them or simply charge more for the same stuff.

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For example:

Cookies stored in shoppers’ web browsers may reveal where else they have been looking, giving some clues as to their income bracket and price-sensitivity.

A shopper’s internet address may be linked to his physical address, letting sellers offer, say, one price for well-to-do zips, another for low income zones.

“Price customization” software can collate such clues with profiles of individual shoppers that internet sellers buy from online-data-aggregation firms … All fairly cheaply.

For example, Orbitz detects whether people browsing its site are using an Apple Mac or a Windows PC and recommends pricier hotels to Mac users.

Some online firms charge people different rates for the same products … for instance, by charging full price for those assumed to be willing and able to pay it, while offering promotional prices to the rest.

Allocating discounts with price-customization software typically brings in two to four times as much money as offering the same discounts at random,

One way to do this is to monitor how quickly shoppers click through towards the online seller’s payment page: those who already seem set on buying need not be tempted with a special offer.

Similarly, companies are beginning to scan Twitter for info on the shoppers since their tweets give useful hints about whether a discount is needed to clinch the sale.

Well, a WSJ investigation revealed that the online pricing tricksters are getting even trickier …

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

October 18, 2012

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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My computer’s algorithms tell me that you’re willing to pay higher prices …

July 18, 2012

I was interviewed by a reporter from the Economist a couple of week’s ago.

Though I served up some prime material (and some red meat), my quotes didn’t make the cut

Dear Ken:
Unfortunately I was not able to use the information you provided, as what we needed was specific confirmation of actual examples of dynamic/custom pricing. Thank you once again for your willingness to share your expertise

OK, enough whining … here’s the gist of The Economist’s article Personalizing online prices

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