Beyond Dynamic Pricing Models

So.

I was reading today about electronic price tags in supermarkets.

In simple terms, we're used to paper tags, and a paper tag on the shelf telling us the price of products.

These paper tags are being replaced by electronic tags. These are small "screens" that give the price. The new tags allow prices to be raised, and lowered, centrally, without someone going out to retag everything. Good so far?

Well these electronic tags also mean stores can indulge in dynamic pricing. That is, when a product is selling particularly well, the store can increase the price auto-magically. This means, one person buying at 13:00pm might be priced differently than someone buying at 13:01pm.

Even accepting this, I was surprised at the new development. I was reading about pricing being tied to phone data. That is, the tag detects your phone, ties it into your past purchases, and knows what your favorite items are. It will increase the prices of those items. It'll tie into past purchases you've made.

I was surprised, but that shows my ignorance. OF COURSE this will be a thing. Buying groceries in the future will be very, very, different.

Thoughts?

I‘ve heard of this and am not sure how it would work. I suppose they’ll get rid of our newspaper flyers or maybe just keep these limited prices static for a week.

Increase the price? That's not gonna work here. Then you can just say: Too expensive. I don't want it. I go to Aldi instead.

We have a supermarket where they decrease the price. That attracts customers.

Customers in all Albert Heijn stores can purchase products with discounts ranging from 25%, 40% to 70%. The principle behind these discounts is called dynamic markdowns. Products nearing their expiration date are offered at a discount via this electronic system. This ensures that less remains on the shelves, less food is wasted, and customers can choose products at a reduced price.

Well, already I just have to SAY something and if it can be sold it will one step away from my electronic cart!

The small local grocery store switched over to the e-tags some months back. I do not like it because it is small and very hard to read. Also, when something is marked down, the print does turn red but that small size makes it difficult to spot. In the past, they would hang a bright orange paper tag on the edge of the shelf which was easily visible from a distance. I told them that the e-tags alone were just too hard to see.
They did start adding the sale tag again.

How in the world can they know what your purchasing patterns are from your phone??? I don't sign up or register at any store (except Ace Hardware, who actually send me coupons that I use) and I always pay cash. There is no way my phone can give them purchase info, right??

VaughanJB said:

Well these electronic tags also mean stores can indulge in dynamic pricing. That is, when a product is selling particularly well, the store can increase the price auto-magically. This means, one person buying at 13:00pm might be priced differently than someone buying at 13:01pm.

Click to expand...

What happens if I see an electronic price tag of $5.00 at 13:00 pm when I put it in my cart and don't get to the register to pay for it until 13:10 pm after the price has gond up to $6.00? Then I will be charged $6.00? Then they may as well have no price tags, since they are meaningless.

I wasn't aware of dynamic pricing models. Nor was I aware of surveillance pricing that is written about in this article I posted more than a week ago. The concept of dynamic pricing seems to be a bit different than surveillance pricing.
Have You Ever Heard Of Surveillance Pricing? Some Businesses Use It.

MACKTEXAS said:

What happens if I see an electronic price tag of $5.00 at 13:00 pm when I put it in my cart and don't get to the register to pay for it until 13:10 pm after the price has gond up to $6.00? Then I will be charged $6.00? Then they may as well have no price tags, since they are meaningless.

Click to expand...

Lol...Yeah, they could just photo me as I come through the door and raise the price of oatmeal on aisle 4.....

I am not sure I will like them as they will be in my area soon. I WAS a person that hung tags and actually taught a class for our new price changers etc. For an average size store, it takes a lot of hours and team to change signs regularly. We had a price changer for each section and on ad nights worked graveyard to change all the tags and often had additional help when a large ad etc. It took a day of prep to sort and make sure we had enough tags for secondary spots like if item was on endcaps or by check stands etc. the cost of printing tags and ours were shipped to us, not included.

Not to mention pulling down sale tags when they expire. lots of customer service issues, I think of all the labor used to refund each time an employee left signs up and customers complained "the sign said".
This process was well over a 3–5-person team for tags full time often with regular OT.

Knowing the chain of stores I worked at, I doubt they bought the best system to do all this AI type "look it is Jeni jack this price up" type of thing. Most will be concerned tags are not knocked off shelf or damaged.

But honestly if batches of price changes are downloaded and the tags switch a store just saved paying 4 or more full time staff. if they can download from a central location, they may eliminate the file maintenance job in each store who entered price changes into computer, as well.

They have talked about it for over a decade since before I left working it that industry still have many friends who do.
This was always talked about as the next step after installing self-checkout ... I remember the big discussions about self-checking was taking jobs and such ..... this tag system Will cut many more jobs, but no one seems to notice that.

stores are finding self-checkout was NOT such a bargain with the rampant theft many face.