More Dynamic Pricing Is on the Way
Retailers who don't use dynamic pricing will be leaving money on the table.Remember the scene in "Casablanca," when a bazaar merchant is trying to sell Ingrid Bergman a set of lace napkins? In a matter of seconds, the original 700-franc price tag is replaced, not once but twice, with others bearing lower figures. "For special friends of Ricks, we have a special discount!"and the price falls to 100 francs. What makes this scene stick in my mind is the sight of the merchant swapping one price tag for another and then another. The form of the transaction is Western: marked prices, the same price for any buyer. The substance of the transaction, though, is suggested by a proverb so old that its origin is unknown: "The value of a thing is whatever it will bring."
We may be coming to the end of what will someday be remembered as a short-lived, rather quaint 20th-century experiment in transactions that are not conducted as one-on-one negotiations between wily sellers and wary buyers. We need to prepare ourselves, I suggest, for a general move toward more dynamic pricing. Retailers who dont use it will be leaving money on the table, and buyers who wont face up to it will do likewise.