Surge Pricing

Amp34 said:
Id there actually any evidence that that's widespread? I've booked dozens of flights and never once had that happen to me.
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A show called Supershoppers did a segment on it. At one point the two presenters searched prices for exactly the same flight, at exactly the same time, one on a Macbook and one on a phone, and the Macbook was more expensive. They also checked the same flight numerous times and saw the prices go up. When using a different PC, they got the original lower price again. They also interviewed an anonymous former online travel agent who confirmed that some websites do this, Trivago being one of the biggest culprits. I'll see if I can find the episode.


EDIT: it was travel agents, not airlines. "Supershoppers S02E03".
 
Amp34 said:
Id there actually any evidence that that's widespread? I've booked dozens of flights and never once had that happen to me.
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The budget airlines always have. EasyJet perhaps starts with tickets at £19 and as the seats sell they go up. I've seen the last seats on the same flight sell for £200. In fact one time when I was booking flights for 7 people it's should have been £140 but my checkout kept coming up with £170. In playing around with numbers I found the first five seats were £20 each but seats 6 and 7 had increased to £35 each.

National Express do similar as well.
 
AndyCr15 said:
Exactly. The ideal time to sell your last sandwich would be just as your next sandwich delivery arrives. So, if you have just one sandwich left, 100 people that want a sandwich before the next delivery, you might as well raise the price top the point only a few of these 100 would be willing to still buy it. You walking away makes you one of the 90+ that will then walk. They still sell their last sandwich but they get maximum profit from it.

As I said, I don't think it will happen, but that's the logic of it. It works the other way for clearing too much stock. We have 100 sandwiches and only 50 people will come to buy one before they expire. Lower the price to the point 100 people will want one...
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Agreed and that's why supermarkets and other shops will go down this route. Looking at the trials though where profits are increased by 3% I don't think the price swings are as dramatic as people might fear in here. If your sandwich, due to demand, has gone up from £3.00 to £3.15 are you really going to leave that supermarket and go to another shop for 15p? No.

Although what the overall affect might be about how you feel shopping at a place with variable surge pricing and that you change your shopping habits to another place which doesn't.

Of course the opposite applies and as people have said, if something isn't selling the system can slowly drop the price long before expiry time to make sure the stock is all sold which is why in trials, wastage has been reduced by 30%.

We all see the short date items being sold off dirt cheap but often they are well past their best and look sad. If for the previous 12 hours those items have been slowly decreasing in price, a lot more will be sold before they are thrown away.

Trials have shown bread works particularly well with price surging. I presume it starts high as the bread is warm and fresh and would decrease as the day goes on
 
Definitely it will work for reducing waste. I'm not sure it can work putting prices up. I just don't see how it can work. As has been said, I wouldn't imaging legally you could put the price up on an item while someone walks from the shelf to the till. Overnight, no problem. On the fly? I'd be surprised.
 
dowie said:
I was wondering about this - same problem the OP highlighted re: the price changing by the time you get to the till

one option is hand held scanners, though these have been around for a couple of decades so far and seemingly don't seem to be preferable to the existing self service tills else we'd already have them in all stores... a substitute for these however could be to allow people to use a mobile phone app
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This is the only way this could work surely. See the item price, scan it to fix the price that you pay and then carry on shopping. The price could then increase for the next customer but they would still be paying the price they see on the shelf so not a problem.
 
Then the opposite applies. If the price is lowering as the date is expiring, surely you don't scan until the last possible second at the till :p
 
This just sounds like a natural evolution to me, making the grocery market more efficient by removing some of the overheads associated with traditional price setting. It could potentially smooth demand a little as well in terms of encouraging people who are more concerned about price to shop elsewhere / at a different time / buy something else. Which brings some benefits in terms of spreading customers of high demand products around a bit rather than going into tescos to find it rammed and all the burgers have been snaffled up.

If you are of a glass half-full mentality, you could argue this means it becomes cheaper to shop compared to peak demand periods for said items. This already happens to some extent with manual discounting late in the day.
It also potentially makes it more efficient to shift stock that isn't selling and reduce waste i.e. the system knows what items are 'overstocked' and can start pushing them via multibuy deals or whatever.

Essentially this is just systemising/optimising pricing strategies which in the internet era have already moved on a long way from say mail order. 20-25 years ago if you wanted to buy something via distance selling you'd see the price in a magazine and then send your order in. The price generally wouldn't change that often. Nowadays online prices can be valid only for a matter of hours.
 
Efour said:
Hmm no I don't think so. There's no discount. Purely from the perspective of the consumer. There's normal price and there's peak rate rip off price.
It's like the never ending closing down shop or the DFS sale....
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But how do you know what the normal price is?

This £2 sandwich that you're talking about is actually a £1.70 sandwich but they have surge priced it to £2 at the times you are in the shop. Now you think that the 'normal' price is £2 because that's the price it normally is at the time you buy it.
 
Great idea for dealing with expiring items getting cheaper the closer to their end date. I'm sure they'll use it to stick a 'premium' price for the freshest produce though. Getting us to pay more for items fresh out on the shelves, which imo, isn't right.
 
I'm trying to imagine the extra manpower used on keeping a large Tesco Extra's shelves on order to allow for the "ever decreasing" automatic pricing to work.

I'm not an expert but take the vegetable section as an example of shorter life products.

I assume at any one time there are multiple batches of the same type of product, let's use lettuce as the example. If it's got a shelf life of 5 days, they must replenish the shelf daily with a new batch.

How do you keep all these prices tracked. How does a customer deal with potentially 3 different prices for a "identical" product.

Surely its incredibly labour intensive sorting items into easily seeable date groups. It's called facing off isn't it? Somone know what I mean?

For reducing waste it could be fantastic but at a much higher level of management.
 
Efour said:
I'm trying to imagine the extra manpower used on keeping a large Tesco Extra's shelves on order to allow for the "ever decreasing" automatic pricing to work.

I'm not an expert but take the vegetable section as an example of shorter life products.

I assume at any one time there are multiple batches of the same type of product, let's use lettuce as the example. If it's got a shelf life of 5 days, they must replenish the shelf daily with a new batch.

How do you keep all these prices tracked. How does a customer deal with potentially 3 different prices for a "identical" product.

Surely its incredibly labour intensive sorting items into easily seeable date groups. It's called facing off isn't it? Somone know what I mean?

For reducing waste it could be fantastic but at a much higher level of management.
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i think you're taking it too far.

its justa simple replacement for having members of staff go and physically change the price tags clearance stuff.

it could be as basic as the little poster saying "meal deal, drink, snack and a sandwich £3.00" is replaced with a screen that can say "meal deal, drink, snack and a sandwich £x" no individual item changes price but the deal could be changed.
 
af for the "what about if it changes price between pickijng iot u pand going to the till. you could just have a time on thier for a planned change.

ie "after 14:30 today price will be Y".
 
So every item will be digitally visually marked?

Ok yeah maybe too far. Ok that's nothing new, I see digital pricing everyday.
 
Efour said:
I'm trying to imagine the extra manpower used on keeping a large Tesco Extra's shelves on order to allow for the "ever decreasing" automatic pricing to work.

I'm not an expert but take the vegetable section as an example of shorter life products.

I assume at any one time there are multiple batches of the same type of product, let's use lettuce as the example. If it's got a shelf life of 5 days, they must replenish the shelf daily with a new batch.

How do you keep all these prices tracked. How does a customer deal with potentially 3 different prices for a "identical" product.

Surely its incredibly labour intensive sorting items into easily seeable date groups. It's called facing off isn't it? Somone know what I mean?

For reducing waste it could be fantastic but at a much higher level of management.
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You're making it far more complicated than it needs to be.
The shop knows historically how much lettuce they sell. One day, for some reason, there is a slump in sales of their lettuce. The system will calculate how much more wasted lettuce they are likely to have by the end of the day, reduce the price to a point where they will increase sales enough to reduce wastage. It can use historical data to calculate the best price to encourage customers to buy more whilst still making profit and accounting for selling the ones which are not going out of date at the lower price.
It's a simple concept really, there's no need for individual prices on each item.
 
Diddums said:
A show called Supershoppers did a segment on it. At one point the two presenters searched prices for exactly the same flight, at exactly the same time, one on a Macbook and one on a phone, and the Macbook was more expensive. They also checked the same flight numerous times and saw the prices go up. When using a different PC, they got the original lower price again. They also interviewed an anonymous former online travel agent who confirmed that some websites do this, Trivago being one of the biggest culprits. I'll see if I can find the episode.


EDIT: it was travel agents, not airlines. "Supershoppers S02E03".
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I have had this happen with my on 2 eyes. Whenever I look for flights I will go through a VPN, but also have used different computers with different OSs. I've saved hundreds of dollars on some trans-atlantic flights just by getting my wife to book through her work computer.

We have had 2 laptops sat side by side on the same wireless network, both running OSX and one will give a higher price than the other due to search history.


There have been independent investigations in to this and the legality scrutinized, but it turns out to be perfectly legal. Lots of cases where fliers sent though house doors quoted different prices due to the relative affluence if the neighborhood. As long as there is no discrimination based on age/sex/gender/race etc. Then companies can dynamically price in anyway they want
 
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