Sunday, March 18, 2012

Dynamic Pricing

You, like me, have probably experienced dynamic pricing at some point in your life.  We all pay more for airline tickets during the holidays.  Concert tickets for the most popular bands are way more expensive.  And Ticketmaster and some sports teams are embracing the idea, also known as real time pricing, with new vigor.  So soon, if not now, you may pay more or less for a similar seat at the ball game based on when you buy.

But, you might be surprised to learn that dynamic pricing is being utilized across many type of regular consumer goods.  Online, if you click on a particular shirt, dress or shoes, or save something to your virtual shopping bag or basket (which I do all the time, virtual shopping helps to satisfy my shopping urges) you might end up paying more for that purchase.  And if you are willing to pay more for goods, or shop at pricier web stores, think Neiman Marcus and Saks 5th Ave., next time you want to buy that t-shirt on line at J. Crew you might be surprised that you'll pay more than someone whose online history shows that they shop at Target.  This Slate article describes the mysterious practice of online dynamic pricing.

I swear, I recently fell victim to this practice at least twice that I know of.  I was in the hunt for a doggy life jacket for our old dog Snarfle as I plan for a west coast fishing trip.  I did some research and found a highly rated life jacket available online at Amazon.  The price was $18 when I saved it to my Amazon shopping cart.  When I went back to purchase the life jacket the price had increased to $26.  I assume, in this instance, the price had gone up based on inventory, there was only one life jacket in size large in stock.

More nefarious, I recently purchased a cocktail dress at Neiman Marcus (online) and did so at work using my work computer.  As an aside, the dress was on super sale and it was for a charity, black-tie event.  I'm not in the habit of shopping at Neiman Marcus.  And as a further aside, I ended up returning the dress due to fit issues.

Thereafter, I was doing some online shopping at J. Crew, J. Crew is my go to place for casual clothes, and had looked at purchasing some items for said upcoming vacation.  I was interrupted and so picked up my online shopping at home and I swear the pricing was different between my home computer experience and my work computer experience. I had read the Slate article, linked above, so I wasn't sure if I was just being paranoid.  But today I am at work so I double checked and the pricing at J. Crew is different using my work computer vs. my home computer.  So, I cleared all my cookies on my work computer and I got, wait for it, a third price.  As an aside, my work computer is routed through a server located in a large city in the north east.  So, if J. Crew is trying to figure out who I am and what price I'll pay for something, before I log into my J. Crew account, it thinks I live in a pricey city.

I assume there are pricing differences in brick and mortar stores as well, so I guess I should not be surprised that on-line retailers will work to charge the most they can depending on where I am located, but pricing based on perceived tolerance is beyond annoying.

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