USA
What is personalized pricing? It means that customers shopping at the
same store are offered
different prices on the same items, depending on their
predicted behavior - something online retailer Amazon has been doing successfully for years.
Using
algorithm technologies, offers can be customized at an individual level - a very attractive concept for retailers. Each year, U.S. manufacturers spend upwards of
$100 billion on trade promotions and it’s estimated that
70% of these promotions are
not effective.
Safeway’s ‘Just for U’ program, uses customer loyalty card
transaction histories to decide which
one-to-one offers to give each customer. Individualized offers are printed based on previous purchases, encouraging increased sales. It's common knowledge that numerous other major retail chains also have loyalty card programs. This data could also be used for similar customized offerings.
Another company,
Engage3, is taking a forward-looking approach, actually
predicting future shopping behavior. This system can figure out
who needs a special offer and who does not. If it knows someone already intends to buy the product, the system leaves them alone.
In the future, consumers may end up receiving
one-to-one offers and
customized pricing more often - to the benefit of shoppers, retailers, and suppliers alike.
Safeway
Engage3