I was interviewed by a reporter from the Economist a couple of week’s ago.
Though I served up some prime material (and some red meat), my quotes didn’t make the cut
Unfortunately I was not able to use the information you provided, as what we needed was specific confirmation of actual examples of dynamic/custom pricing. Thank you once again for your willingness to share your expertise
OK, enough whining … here’s the gist of The Economist’s article Personalizing online prices …
Online retailers are using software that helps them detect shoppers who can afford to pay more or are in a hurry to buy … and, present pricier options to them or simply charge more for the same stuff.
Cookies stored in shoppers’ web browsers may reveal where else they have been looking, giving some clues as to their income bracket and price-sensitivity.
A shopper’s internet address may be linked to his physical address, letting sellers offer, say, one price for well-to-do zips, another for low income zones.
“Price customization” software can collate such clues with profiles of individual shoppers that internet sellers buy from online-data-aggregation firms … All fairly cheaply.
For example, Orbitz detects whether people browsing its site are using an Apple Mac or a Windows PC and recommends pricier hotels to Mac users.
Some online firms charge people different rates for the same products … for instance, by charging full price for those assumed to be willing and able to pay it, while offering promotional prices to the rest.
Allocating discounts with price-customization software typically brings in two to four times as much money as offering the same discounts at random,
One way to do this is to monitor how quickly shoppers click through towards the online seller’s payment page: those who already seem set on buying need not be tempted with a special offer.
Similarly, companies are beginning to scan Twitter for info on the shoppers since their tweets give useful hints about whether a discount is needed to clinch the sale.