Don’t Blink, The Price Will Change
Seventeen years ago, news hit that Coca Cola was planning on putting thermometers in their drink machines so that they could raise the cost of a cold drink when the weather warmed up. Having spent all those years in the vending machine business, the idea itself was ingenious, but as a consumer, it seemed predatory.
Seventeen years later, here we are again.
The Wall Street Journal has a story (read here) on how dynamic pricing – that is, sellers changing prices on an hour-by-hour or minute-by-minute as demand fluctuates – is becoming more and more common. It starts off by talking about… a zoo. Should you ever visit the Indianapolis Zoo, you can expect to pay $8 to enter… or $30… depending on when you go. They are using the airline model, changing their prices based on expected demand and advance ticket sales. So it’s cheap on cold days and expensive on days with school groups.
I can see the tagline now – Indianapolis Zoo: Our prices are more active than our animals!
Some of the other examples they list are a little closer to home than Indiana, and they may surprise you. If you’re a Kohl’s shopper, you may have realized that they digital pricing on their displays – they’re e-ink, like the old Kindles – but did you know they are constantly changing prices based on demand? Sales there don’t last days, they last hours. And while Uber made waves last year with their “surge” pricing – upping the cost of a ride when there was high demand – did you know that Disney and SeaWorld are testing the ideas in their parks??
The idea is being experimented with everywhere – from theme parks to car dealerships – but thanks to the experimentation from companies like Amazon and Kohl’s, it is becoming widespread throughout retail. The end result is and will be – you guessed it – consumers like you paying higher prices (unless you want to stare at a listless lion in the middle of an Indiana blizzard). And while we usually raise Cain the first time we hear about these types of pricing schemes, we don’t even notice when it becomes commonplace.
This is going to make playing “The Price Is Right” much more complicated…