Demand and Supply
Demand and supply has always influenced the price of a product or a service. Summer holidays as soon as the schools have broken up, a taxi when the trains are not running, concert tickets. We all know this. We understand this. And as much as we might not like it, we can tolerate it because it is a simple equation.
What has my battery level got to do with it?
But what about when there are other factors at play which are much less obvious?
I was booking an Uber when my son asked me what level of charge my phone had. Why, I asked? “Because there are reports that you get charged more if your battery level is low”. That cannot be true, so I did a bit of digging and as per The Brussels Times, it appears that it may indeed affect the price you are quoted. (It is worth pointing out that whilst Uber acknowledge that they DO read your device charge level, they deny applying any price differentiation to it).
Device based pricing
A Bengaluru – based founder reports that when using e-commerce site Zepto, there was a considerable uplift if buying the same products with an i-phone versus an android device. Apple’s echo system is expensive as a vendor (30% in year one), so you can see why sites might need to cover additional costs.
But it is not just the subscription cost element. Travel company Orbitz were found to show travellers the more expensive hotel options over other device users. Why? Because their research showed that Mac users would be willing to spend 30% more.
Browser History
Known Host undertook an experiment to see what the price impact of repeat visiting of US travel firms. With one user deleting their history and another not, the results are quite staggering. Booking.com returned an average increase of $254.20 over the other user. At the other end of the scale, IHG only showed a $5 increase.
Location
At first glance this feels less “dark”. Afterall, delivery charges are effected by a customers location. But what if there is no delivery? Research undertaken by the Wall Street Journal (and reported here by Consumerist) found that Staples changed prices based on your location. Live near a Staples competitor? Prices are lowered. Live too far to drive to a competitor? Higher price.
Where will this lead?
The Federal Trade Commission paints a rather glib picture. If companies can track everything you look at, where you are, who you are and what you do, personalised pricing is here to stay.
As ever, it’s not so much that corporations can and do adopt these processes. It’s the transparency, or rather lack of, that causes some concern.
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