Marketers continue to use dynamic pricing as a method to increase profit margins in today’s data-driven world. As an update to an earlier post on dynamic pricing, in this post I draw your attention to some of the ethical issues surrounding dynamic pricing.
First, as a review – dynamic pricing involves adjusting pricing based on different factors rather than common practice of a standardized, one-price for all situations aspect we typically encounter in brick and mortar stores. The increase in online shopping as well as data makes dynamic pricing more plausible as outlined in Greg Petro’s article on dynamic pricing which appeared on Forbes.com. In his post, Mr. Petro highlights a number of examples which stirred controversy and call into question the ethical side of dynamic pricing.
In addition to considering, questions from my previous post on dynamic pricing and when/where marketers might use it, what ethical concerns do you think consumers might have about marketers using dynamic pricing? Why?
Digital marketing is a hot topic in the field of marketing and one I’m passionate about. One of the reasons I enjoy the digital marketing field is each day there is something new to learn about. What worked yesterday in terms of online marketing, social media, email, mobile, etc. may not work today. It really forces marketers to think about how the traditional aspects and marketing theories might apply in a digital setting.
Over the last few years, my consulting experience includes a number of digital media based projects. Part of this process typically involves an audit of the companies digital media presence along with reviewing their competitors’ digital media. I’ve seen several cool campaigns and I’m always interested in seeing other interesting campaigns – so I thought I’d ask you each to share your favorite one.
So what is your favorite digital marketing campaign? Specifically, I would like you to share an example of a digital, social media, or mobile-based marketing campaign that you found interesting or unique and explain why you like it (i.e. why do you think it is cool?).
Make sure to include links to the campaign, video, images, and/or social media page where appropriate. Given what you learned about marketing this semester, how do you think this campaign could be improved?
Our module on supply chain management and retailing includes an overview of retailing trends. As I noted in my video, the concept of omnichannel retailing is a hot button issue for marketers. In today’s digital world, manufacturers and retailers need to determine the optimal in-store, online, and mobile experiences desired by their guests. Beyond in-store experiences, marketers also must consider how changes to the store impact other aspects of the supply chain and distribution strategy. Manufacturers for instance might be interested in how retailers can enhance their brand’s experience for the retailer’s customers both in-store and online leading to different distribution partnerships. Retailers also need to determine how to integrate online and offline business practices related to in-store pick-up/returns, online visibility of in-store inventory, mobile payment, among other aspects.
While the Internet has created several online-only retailers, we are also seeing online-only retailers look at adding brick-and-mortar showrooms. Warby Parker and BlueNile are two examples that comes to mind. Direct-to-consumer retailing models like Dollar Shave Club and others have also blossomed over the last few years. Additionally, you have Amazon.com increasingly pushing boundaries with same-day shipping and pushing forward with drone deliveries. Retailers are even looking at how Uber can be used for home deliveries. Clearly a lot is going on in terms of the “place” component of the marketing mix.
One of the marketing consulting projects I’m working on this summer is focused on identifying what the future store should look like for a particular retailer. As part of this process, we’ve conducted marketing research via store management interviews, customer interviews, and customer surveys. Inspired by this, I thought I would include a few of my favorite YouTube videos related to omnichannel and the future of retail for your consideration.
Rebecca Minkoff’s Store of the Future
Macy’s Goes Omnichannel
Given the videos on the future of retailing in our module and your experiences, what do you think the future in-store shopper will expect from their experience? What do you think it will take to deliver on these expectations over the next few years? Finally, what retailers do you think are best positioned to deliver on this promise right now?
While hotels and airlines have used dynamic pricing for a long time, the last few years have seen an increase in marketers using dynamic pricing to offer their product/service to consumers at the right price based on time or other factors that allow the company to maximize profit. In the age of “big data” and multi-channel shoppers, retailers and manufacturers have a massive amount of information to use to create dynamic prices. Amazon.com and other e-commerce retailers have popularized this pricing method. But they are not the only ones taking advantage of frequent and real-time pricing strategies.
As an example, a number of professional and collegiate sporting events now price tickets based on demand and offer dynamic pricing instead of standard ticket prices for all games. Bloomberg Business reported certain ski resorts started testing dynamic pricing models in February 2015. Uber’s innovative disruption on taxi services also uses dynamic pricing based on demand, weather conditions, driver availability and other factors. However, posts from Forbes.com and MIT Technology Review suggest consumers may not always be happy with this type of pricing strategy, suggesting marketers must carefully consider the impact of dynamic pricing on consumer attitudes and behaviors.
How can marketers begin to keep track of all the pricing data and consumer demand in order to identify the most appropriate “real-time” pricing strategy? Luckily, there are a number of different software solutions that provide pricing data and track consumer demand/interest in different products or services. Wiser.com, is one company providing dynamic pricing solutions to retailers and manufacturers. The site provides an interesting infographic examining dynamic pricing and four relevant pricing strategies including segmented pricing, peak pricing, penetration pricing, and time-based pricing.
So class, what types of products/services do you think can benefit the most from dynamic pricing? Which dynamic pricing strategy outlined in the infographic might be the most appropriate for your suggested product/service? What concerns would you have from either a consumer or marketer’s perspective related to dynamic pricing?
I’ve been paying close attention to some of the major changes occurring as a result of the Google mobile-friendly algorithm changes that SEO experts have labeled as “Mobilegeddon.” According to some early reports, JCPenney’s is one of the companies that has seen a bump in organic search visibility. Given some of the company’s in-store and other marketing failures over the last few years this was somewhat surprising to me.
Do others find JCPenney’s mobile moves to be such a surprise?
A recent blog post from The Washington Post outlines how JCPenney’s is one of the first retailers to jump on the Apple Watch app bandwagon. In my digital marketing courses, we’ve been discussing the impact of Mobilegeddon and examined multichannel retailing earlier in the semester. The blog post seems to shed some light on the importance of mobile to JCPenney’s omni-channel retail strategy moving forward indicating that the company estimates half of their customer base uses an iPhone. Perhaps this explains JCPenney’s movement in early Mobilegeddon results too?