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Supporting Opinion | Dynamic Pricing: The Plus & the Minus

To Buy or Not to Buy, Right Now

Noreen Seebacher
12/17/2012  
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tinym
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Data Doctor
Re: Limit Order
tinym   1/3/2013 7:54:55 PM
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@Lyndon you're right about the sales. I would have been more frustrated if the price fluctuated daily or hourly.

smassi
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Prospector
Re: Supply, demand, athletics...?
smassi   1/2/2013 2:44:18 PM
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Challenges of dynamic pricing in sports are many. First, it is a long term strategy, where probably 60+% of games are sold below "list". You must be diligent in selling inventory below list, where potential increases in volume will make up for the decrease in revenue per ticket. Most dynamic pricing teams have struggled with this.

Second, most teams implement a floor on how low they'll let ticket prices float in an attempt to protect season ticket holder value. In many cases, teams still cannot compete with secondary market pricing.

Third, unlike airlines, where the ability to add value to other areas of the experience is nill, sports teams have multiple areas and ways where they can reward fans and add value to the game experience without deeply discounting prices.

Lyndon_Henry
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Blogger
Re: Limit Order
Lyndon_Henry   1/1/2013 11:34:45 PM
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..

TinyM writes


 not long after our converstation began about variable pricing I experienced the frustration it brings. I was shopping on Amazon.com and a few other sites for a nicer camera. I found that the current rate was about $70 less than the advertised full price. I watched these few sites for a few days hoping to see a drop. The price increased to the regular price and I removed the item from my cart. I hoped to find an after Christmas deal but didn't get one.


 

But at least the price apparently stayed firm for "a few days".  I would think one's frustration and stress level would soar if the price were swinging up and down within hours or even minutes.

Otherwise, things do go on sale for short periods of time (e.g., a week or so) and you need to snap 'em up if that's what you want.  But I wouldn't really call that "dynamic pricing".

 

tinym
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Data Doctor
Re: Limit Order
tinym   1/1/2013 3:38:45 PM
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@Sandra not long after our converstation began about variable pricing I experienced the frustration it brings. I was shopping on Amazon.com and a few other sites for a nicer camera. I found that the current rate was about $70 less than the advertised full price. I watched these few sites for a few days hoping to see a drop. The price increased to the regular price and I removed the item from my cart. I hoped to find an after Christmas deal but didn't get one.

Pierre DeBois
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Blogger
Re: Supply, demand, athletics...?
Pierre DeBois   1/1/2013 12:04:52 AM
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Sport event tickets are a good example, mnorth. The incentive is certainly a good match. Sports teams are still recouping from investment in stadiums over the last several years, but are now competing against a number of ways fans can see their game wihtout being in the seats.  Dropping a price to reflect poor weather is a good incentive, but time will tell if the juice was worth the squeeze - if such measures draw fans significantly.

sgittlen
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Blogger
Re: Limit Order
sgittlen   12/28/2012 5:28:08 PM
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@tinym, I've definitely seen people travel for lower cost gas. And yes, at some point there are diminishing returns. I feel the same decision making will be done on dynamic pricing. Either you'll build your shoppng around the price changes or you won't. Happens all the time with all sorts of goods and services today.

Lyndon_Henry
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Blogger
Re: Supply, demand, athletics...?
Lyndon_Henry   12/20/2012 9:52:07 PM
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..

MNorth writes


Recently I've noticed professional sports teams doing dynamic pricing with tickets to games.  Beth recently posted on the Pittsburgh Pirates using analytics, and dynamic ticket pricing is part of their strategy.  If the weather's looking bad for a game, ticket prices go down.  If the team goes on a seven game winning tear, ticket prices go up.  Star player goes down with an injury...you get the idea.  I'm not sure if I like it or not yet, I guess time will tell.


 

Too bad if you've budgeted $100 for a seat and ... whoops, it's $200!  Oh, wait, it's $75 ... No, it's $225!  No, wait...

I guess this would work for those who (1) would attend the game at any price (why didn't they just buy a season ticket?), and (2) impulse buyers...

 

mnorth
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Blogger
Supply, demand, athletics...?
mnorth   12/20/2012 2:25:08 PM
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Recently I've noticed professional sports teams doing dynamic pricing with tickets to games.  Beth recently posted on the Pittsburgh Pirates using analytics, and dynamic ticket pricing is part of their strategy.  If the weather's looking bad for a game, ticket prices go down.  If the team goes on a seven game winning tear, ticket prices go up.  Star player goes down with an injury...you get the idea.  I'm not sure if I like it or not yet, I guess time will tell.

Maryam@Impact
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Blogger
Price insurance
Maryam@Impact   12/20/2012 12:34:20 PM
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Noreen it really is creating almost a hyper pricing scenario, what will be the price and is it worth it you make the leap. Some of the credit cards are offering price insurance on purchases to encourage consumers to shop and be assured the lowest price within 30 days regardless of where they purchased. I am just not sure that they could possible find every price for every product but it is an option.

Lyndon_Henry
User Rank
Blogger
Algorithmic trading for retail shoppers?
Lyndon_Henry   12/20/2012 8:45:08 AM
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..

Noreen writes


According to the Financial Times, high-speed trading tools pioneered in the stock market are increasingly driving price movements on Amazon as sellers use them to undercut and outwit each other. Prices change as often as every 15 minutes as some of the two million sellers on the site join the online retailer in using computerized tools, often developed by former data miners at banks.


 

Highspeed algorithmic may work in stock trading, where the items and the criteria are relatively very simple.  But consumers make far more complex decisions and need more time to deliberate.  Oops, that deal is gone.  Start deliberating all over again ... or just give up...

 

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