Total Retail Features Connors’s Article on Price Fluctuations: The Digital Reimagining of Supply and Demand in Retail
Total Retail, an online publication dedicated to providing insights and information about the retail industry, has published Dan Connors‘s article, “Price Fluctuations: The Digital Reimagining of Supply and Demand in Retail.”
Price Fluctuations: The Digital Reimagining of Supply and Demand in Retail
Dynamic pricing has long been a part of the rideshare experience, sparking unhappy social media posts when “surge pricing” kicks in after a night out on the town or a major event. But while the immediate leap from fluctuating fares for a ride home to varying prices for your lunch might seem a stretch, it’s a concept that’s gradually making its way into more traditional retail environments. It also marks a significant transformation in how businesses interact with and respond to consumer demand, reminiscent of an age-old practice known by another name: seasonality.
We’re all used to seeing coats command higher prices in September when demand peaks, only to drop by March. But thanks to technological advancements, real-time application of dynamic pricing allows for an unprecedented level of precision on much smaller timescales of hours instead of months. As a result, retailers can potentially offer discounts during quieter hours to draw in additional customers and optimize both sales and customer engagement throughout the day.
However, as retailers apply dynamic pricing principles to everyday purchases, it’s critical they position it properly with consumers and continually gauge their sentiment. If customers experience dynamic pricing as profiteering and price gouging during peak demand, the brand will suffer significant damage, as some retail companies have discovered when they implemented it and lost control of the narrative. Consumers must see dynamic pricing as a reward or a discount so they can get better deals during periods of less demand, such as $1 off a sandwich at 3 p.m.
