Regional Pricing

 
 
By Evan Schuman  |  Posted 2005-06-07 Email Print this article Print
 
 
 
 
 
 
 


Rosenblum added that this does bring up an issue being debated in e-commerce circles. More and more retail chains are seriously looking at regional pricing, where California stores may charge more for the same items than, for example, Iowa stores.
But if a retail chain sets prices by region, how does it do that on its Web site? Is it handled in the same way as state sales tax, where a consumer is charged a different amount depending on the ZIP code where the item will be shipped?
What if item isn’t shipped, such as downloadable software? Will cookies—or an IP address—be used to try and identify a consumer’s true geography? Rosenblum said that it’s certainly true that retailers—BestBuy is a frequently cited example—are trying to discourage bottom feeders, but it’s mostly being done by de-emphasizing—or simply ceasing to carry—products that seem to attract the bottom feeders. In other words, the reverse of standard stocking mentality: Find out what they want and then make sure we get rid of that.
Read more insight here from Evan Schuman about the potential drawbacks of retail technology. The vendor perspective is somewhat more tempered. Scott Friend, the president and co-founder of ProfitLogic, a major software house specializing in retail pricing strategy, said that none of his clients are using his software—to his knowledge—on Web sites to deliver that kind of individualized pricing, but that the capability is pretty much there. The typical changes are sometimes weekly or price changes for different styles of products based on popularity, inventory or other factors. "But it certainly doesn’t change per customer," Friend said. He sees the potential for such uses in the future to be less disagreeable. "I don’t see anything unethical about" using cookies to set pricing, although he quickly added, "invading someone’s privacy is certainly not within the realm" of his software and stressed that it was a matter of "tailoring the assortment to each and every customer." Friend talked about the various product comparison sites. "If the consumer is using the tools, why not the retailer?" he asked. Retailers "should have the ability to filter out" customers they don’t want, such as bottom-feeders. Although the report is likely to stir industry debate, analyst Rosenblum had few nice things to say about the University of Pennsylvania’s research, but her unintentionally nastiest attack was when she referred to the school as Penn State. At Ivy Leaguer U. of P., them’s fightin’ words. Evan Schuman is retail editor for Ziff Davis Internets Enterprise Edit group. He has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop anytime soon. Check out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.


 
 
 
 
Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.
 
 
 
 
 
 
 

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