How retailers use personalized prices to test what you’re willing to pay

If you’ve noticed closely enough, you might have observed that there are times when you look up hotel or flight prices on your phone and on the website and see a disparity between the two. Let’s delve into why it is so.
  • The fundamental concept of the downward sloping demand curve in Economics illustrates that, for most products, some customers are willing to pay more than others. To exploit that, pricing managers employ techniques that try to determine and charge the exact price that each customer is willing to pay.
  • Larger profits can be extracted from customers who value the product highly. Meanwhile, if discounts can be discreetly offered to customers with a lower willingness to pay or lower disposable income, additional sales are reaped. The result is a more profitable customer base, with some shoppers paying more than others.
  • Web retailers can profile their shoppers based on certain giveaways. Is a shopper using a laptop, app, desktop, or internet on their smartphone? What operating system are they using? Where are they located? A customer’s actions also provide pricing clues: What other products are they looking at? How many times have they visited the site?
  • Much like car salespeople can profile their customers based on their appearance, web retailers can electronically evaluate the characteristics and actions of each shopper to create a profile that generates a personalized price.
The bottom line, though, is that based on a few characteristics (app or web, signed in as a member or not), a rudimentary type of personalized pricing is occurring: Some customers are receiving different prices than others. Whether it is ethical, is a question that remains to be discussed. 


15 thoughts on “How retailers use personalized prices to test what you’re willing to pay”

  1. Can I just say what a comfort to uncover someone that genuinely
    understands what they are discussing on the net. You actually realize how to bring a problem to
    light and make it important. More and more people should look at this and understand this side of your story.
    I can’t believe you’re not more popular given that you surely possess the gift.

  2. An outstanding share! I’ve just forwarded this
    onto a coworker who was doing a little homework on this.
    And he in fact bought me lunch because I found it for him…
    lol. So let me reword this…. Thanks for the meal!!
    But yeah, thanks for spending time to discuss this topic here
    on your internet site.

  3. I do like the manner in which you have presented this specific concern plus it does indeed supply me a lot of fodder for thought. Nevertheless, because of just what I have seen, I simply hope as the actual remarks pack on that individuals keep on point and don’t get started upon a tirade involving the news du jour. Anyway, thank you for this exceptional point and whilst I do not really agree with this in totality, I regard the viewpoint.

  4. An impressive share, I just given this onto a colleague who was doing a bit evaluation on this. And he actually purchased me breakfast because I discovered it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to discuss this, I feel strongly about it and love studying more on this topic. If attainable, as you turn into experience, would you mind updating your blog with extra particulars? It is highly helpful for me. Large thumb up for this blog submit!

  5. Thanks for your useful article. One other problem is that mesothelioma cancer is generally a result of the inhalation of fibers from mesothelioma, which is a cancer causing material. It can be commonly observed among individuals in the building industry who’ve long contact with asbestos. It is caused by living in asbestos protected buildings for a long period of time, Genetic makeup plays a crucial role, and some consumers are more vulnerable for the risk as compared to others.

Leave a Comment

Your email address will not be published. Required fields are marked *