menu

Why Shoppers Are Fed Up With Fixed Prices

Why Shoppers Are Fed Up With Fixed Prices
Advertising

PSFK, with The Curve Report from NBCUniversal Content Innovation and Creative Marketing, examines the impact of flexible pricing in today’s retail industry.

PSFK Labs
  • 27 october 2013

In the world of retail, a ‘one size fits all’ pricing system has been the accepted norm for generations, but why is this? When you stop and think about it, every sales transaction is in some way unique, whether it’s because of fluctuating demand in the marketplace, individual consumer status, or the relative shelf life of that product. What if price could be calculated in real time for every purchase you make?

Based on data from The Curve Report, this same sentiment is shared by a majority of Gen Xers and Ys: As many as 76% of 18- to 49-year-olds are interested in trying a new flexible pricing model, and two-thirds say they prefer pricing that is flexible (66%) over pricing that is fixed (34%). Shifting to a more flexible model could provide opportunity to open up new markets, change buying patterns, reduce waste, and uncover a whole new set of purchasing behaviors among consumers.

2

Source The Curve Report

In collaboration with the minds behind The Curve Report from NBCUniversal, PSFK is investigating the rise of flexible pricing and how this new trend will shape how brands market their products to individual shoppers and how savvy consumers spend their money.

In many ways, the foundation for these flexible pricing models is already in place as a result of current shopping behaviors. The Curve Report found that 80% of Gen Xers and Ys describe themselves as ‘bargain shoppers’ who value price over convenience, which means that there are more than a few consumers who will tweak their shopping style and brand loyalties based on real-time personal pricing. This sentiment presents itself as a huge opportunity to retailers who can develop clever ways to offer the best overall value, and allow consumers to vote with their wallets.

3

Putting this flexible pricing model in action, supermarkets Safeway and Kroger are offering methods to determine individualized prices for shoppers. The system works by analyzing a shopper’s previous purchases, and leveraging that data into insights about what they might purchase in the future. For example if a person makes purchases that might indicate they are part of a large family, the supermarket could offer targeted discounts on bulk food items, or give discounts only on that customer’s preferred brands. By creating specific prices and offers based on shoppers’ habits, the grocery store has a way to improve on their thin profit-margins, at the same time offering deals to the customer only on the items they are specifically interested in purchasing.

4

Flexible pricing also allows brands to connect with consumers in innovative ways. For example, Kapture is an app that rewards users for taking pictures of ‘moments’ and sharing them on social networks. The free iPhone app lets brands and businesses leverage anyone taking a photo as a brand ambassador by offering instant rewards, including discounts and physical goods. These can either be redeemed instantly, saved for a later date, or given as gifts to friends. Kapture has signed up more than 300 merchants in New York City, and allows brands to connect with their consumers and benefit from the millions of photos already taken and shared monthly via social media.

5

In a more playful application of this idea, Spanish marketing agency Momentum recently installed 18 vending machines for Coca-Cola’s lemonade drink Limon&Nada that offer discounts when the temperature rises. At ambient temperatures of up to 77°, the cans of lemonade cost 2 euros. At 78-84°, they are around 30% cheaper at 1.40 euros, and when the temperature reaches 85° and above, they are half price at just 1 euro. This creative method of pricing lasts through the summer months, and offers yet another way to think about pricing products based on demand.

6

Whether applying this model to help prevent food waste in supermarkets, or to make retailers bid on customers for their business, flexible pricing models are poised to fundamentally alter the way people think about spending their money. As this approach becomes more widely adopted, it will be up to retailers to continually innovate, and devise clever and creative ways to attract the ever-savvy consumer.

For a closer look at how brands are approaching this issue, be sure to head over to The Curve Report to check out The Price Is Right (Now!), which takes an in-depth look at how flexible pricing is impacting a variety of industries.

curve_article_banner

The Curve Report from NBCUniversal

The Price Is Right (Now!)

Images via The Curve Report, DealFlicks, Kapture, Momentum

Advertising
Trending

How Indiegogo Is Becoming An Adult Product Destination

Retail
Home september 23, 2016

Watch This Fire Pit Dance Along To Your Favorite Song

Music City Fire is a system that is designed to flicker in time to ambient music

Automotive september 23, 2016

Slick GPS Navigator Gives Directions To Moped Riders

This small, round device attaches to a sideview mirror to display maps for safer traveling

Trending

Get PSFK's Related Report: Future of Automotive

See All
Home september 23, 2016

A Clock That Beautifully Manages Your Information Overload

The wall-mounted timekeeper is made to help people maintain focus and stay up to date with their appointments

Arts & Culture september 23, 2016

Performance Piece Blends Dancers Into Folds Of Light

The work provides commentary on the increasing connection between programmed and analog dimensions

Related Expert

Ramesh Raskar

Virtual Reality & Computer Imaging

Design & Architecture september 23, 2016

Design Firm Adapts Childhood Homes For Unemployed Young Adults

The studio has unveiled three prototypes of transformed living spaces for people forced to move back in with their families

Health september 23, 2016

These Chocolate Squares Claim To Reverse The Aging Process

A group of researchers from Cambridge University have developed a candy bar that promises to give you a youthful glow

Cities september 23, 2016

Food-Producing Architecture Competition Seeks To Better Feed Cities

A design challenge in Copenhagen highlights the need and beauty of urban farming

PSFK LABS REPORT

Future Of Automotive
Scenarios Driving The Digital Transformation Of An Industry
NEW

PSFK Op-Ed september 23, 2016

Productivity Expert: The Magic Of The Five-Hour Workday

Stephan Aarstol, Founder of Tower Paddle Boards, explains why the modern notion of office hours needs to evolve

PSFK Labs september 22, 2016

The Future Of Work: Why Innovation Is Every Employee’s Job

PSFK Labs sits down with management at Johnson & Johnson to learn how the company comes up with their next ‘big idea’

Health september 23, 2016

Wearable Monitors Sun Exposure To Prevent Sunburn

The clip monitors UV rays to make sure you're not receiving too much sunlight

Culture september 23, 2016

This Exhibition’s Crowning Jewel Is An 18k Gold-Plated Toilet

The piece, titled 'America,' is meant to raise questions about the country's wealth inequality

Culture september 23, 2016

Match Up With Dates On Tinder Based On Your Music Preferences

A new partnership with Spotify lets people pair up based on shared tastes in artists

Entertainment september 23, 2016

Capture, Cut Up, And Configure Your World In 360 Degrees

To meet a booming 360 and VR video-capturing industry, a multimedia software company bolstered its media editing suite for 360-video creation

PSFK LABS REPORT

Future Of Work
Cultivating The Next Generation Of Leaders
NEW

Advertising september 23, 2016

Buy Movie Tickets Directly From Your Facebook Profile

The new feature is part of a campaign from Fandango to further imbed social media into the ticket vendor's digital presence

Asia september 23, 2016

Co-Working Space Brings The Calming Atmosphere Of Nature Indoors

An architectural firm in China has designed a new type of shared office that prioritizes the natural environment

Retail september 23, 2016

Live Beacon Simplifies Cloud Sharing For Businesses

The battery-powered device and smartphone app allow anyone to send location-specific content without the hassle of code or hardware

No search results found.