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Retail’s New Pricing Battle

May 8, 2017

Not only are we losing retailers at an amazing clip, but it seems free market pricing is going by the wayside too.

That’s because online retailers are using our data against us. Where consumers would use the web to compare prices between companies, web vs. brick-and-mortar stores and so on, now online retailers are shopping us. It has consequences we do not yet understand.

For instance, where you live, when you buy, what you’ve bought, and more, all factor in to the price you see when logging on to Amazon. Simply put, the price you pay depends on who you are.

In the beginning, online shopping was a big benefit to consumers. We could compare several things to get the best deal.

But now, online retailers adjust prices to find the highest price you will pay. Daily pricing histories on any given item can look like stock charts.

Traditional brick-and-mortar stores used to drive sales with a common price. Periodic sales and such helped create temporary demand – perhaps to clear out inventory. But now online prices change all the time. Soon, “list price” will mean nothing. Instead, it will be “your price” vs. “my price,” which can be both different and unknown.

Has the concept of competition flipped from firms competing for market share to consumers competing for business’ best prices? Perhaps we’re already there.

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