Dynamic Pricing's Shifting Landscape: Despite the controversy sparked by Wendy's dynamic pricing experiment, tech vendors are still exploring and offering smart variable pricing tools.
Focus Shift: Companies like Juicer are moving away from demand-based dynamic pricing and towards competitor-based pricing tools, helping restaurants stay competitive in a price-sensitive market.
Alternative Approaches: Other startups, like WookAI, are developing tools that adjust prices based on real-time supply chain costs, offering a more proactive and strategic approach to pricing.
Continued Support: Some companies, like Chowly, continue to advocate for demand-based dynamic pricing, highlighting its potential to maximize delivery revenue.
Rebranding the Term: There's a growing sentiment that "dynamic pricing" has a negative connotation, and terms like "smart pricing" or "variable pricing" might be more suitable for pricing tools that use multiple variables beyond just demand.
Key Takeaway
Dynamic pricing, particularly demand-based, remains a controversial topic. However, the industry is evolving, with companies exploring alternative smart pricing tools that consider factors like competitor prices and supply chain costs. The term "dynamic pricing" itself might be due for a rebranding to better reflect these evolving approaches.
Trend
A shift away from solely demand-based dynamic pricing towards more comprehensive and strategic pricing tools that consider multiple variables.
Consumer Motivation
Consumers are increasingly price-sensitive and seeking value. They react negatively to practices like surge pricing that feel manipulative.
Driving Trend
The current economic climate, with rising costs and inflation, is making consumers more price-conscious.
The backlash against Wendy's dynamic pricing experiment highlights consumer resistance to perceived unfair pricing practices.
People Referred to in the Article
Ashwin Kamlani: Cofounder and CEO of Juicer
David DeSantis: Cofounder and CEO of WookAI
Sterling Douglass: CEO of Chowly
Robbie Earl: President of Linked Eats
Description of Consumers/Product/Service and their Age:
Consumers: The article primarily focuses on restaurant customers, particularly those who are price-sensitive and use delivery apps. No specific age group is mentioned.
Product/Service: The article discusses smart pricing and variable pricing tools for restaurants.
Age: Not specified.
Conclusions:
While demand-based dynamic pricing faces challenges due to consumer perception, the broader concept of smart or variable pricing is gaining traction.
Restaurants are seeking tools to help them navigate the challenging economic climate and remain competitive while offering value to customers.
Implications for Brands:
Brands need to be transparent about their pricing strategies and avoid practices that feel exploitative to consumers.
They should explore smart pricing tools that consider multiple variables, including competitor prices, supply chain costs, and customer demand.
Communicating the value proposition of their offerings is crucial in a price-sensitive market.
Implication for Society:
The adoption of smart pricing tools could lead to more efficient pricing in the restaurant industry, benefiting both businesses and consumers.
Transparent and fair pricing practices are essential to maintain consumer trust and loyalty.
Big Trend Implied:
The growing importance of data-driven and strategic pricing in the restaurant industry.
A shift towards more sophisticated pricing tools that consider multiple variables beyond just demand.
The need for brands to be transparent and fair in their pricing practices to maintain consumer trust.
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