Is personalised pricing next?

[rebel]

LONDON, United Kingdom — Personalised pricing is as old as commerce itself. A market stall owner sizes up a prospective customer based on a wide range of signals — such as how she speaks and dresses — then offers her a special price: “For you, ten dollars.”

Today, consumers are more used to standardized pricing and the ‘law of one price’ generally prevails, based on the logic that differences between prices for the same good are eliminated by market participants taking advantage of arbitrage opportunities. Indeed, so the theory goes, when a product is sold via multiple channels, the cost should not vary by more than the differences in shipping, taxation and distribution costs. If it does, with a huge range of retailers to choose from, customers will simply shop elsewhere.

Nonetheless, some online retailers are returning to the tactics of the bazaar, leveraging the data trails generated by Internet users to set different prices for different customers.Just like the seller at a market stall, e-tailers can now ‘size up’ each customer that visits their site. “Every retailer, once you get to their website, they know where you are from because of your IP address. And they know that to the accuracy of a ZIP code, so they can know that you are from a more affluent area, for example,” said Hana Ben-Shabat, partner for the Americas at A.T. Kearney, a global consulting firm.

This, combined with cookies, can tell a company a significant amount about individual customers, including some of the websites they have visited, how regularly and for how long; which products they inspect and purchase. In addition, cookies store information that customers volunteer in online forms — for example, shipping address and other profile data. Based on this kind of data, it’s possible for retailers to predict what products a consumer is interested in buying, when they are likely to buy them and, critically, the price they would be willing to pay.

A demonstration of Sheriff on the Luisa Via Roma website showed that Dolce and Gabbana’s medium reptile-skin ‘Sicily’ bag would appear to cost €4,665.00 to a customer based in Israel, but €6,622.00 to a shopper in Massachusetts. “We see the pricing, but we cannot yet decode it and understand why it happens,” said Laoutaris.

There are no known cases of fashion companies implementing individualised pricing online. But for luxury brands in particular, leveraging personalised pricing could be damaging as it throws into question the intrinsic value of their goods. Brands like Louis Vuitton do not discount their products, so as not to undermine consumer perception of their value.

Yet the luxury fashion industry has long charged customers in different countries different prices for the same goods and is used to the idea of treating different segments of customers differently via personalised promotions, VIP discounts, exclusive sales and other tactics.

http://www.businessoffashion.com/2015/03/personalised-pricing-turns-e-commerce-online-bazaar.html

 

[fashionista-ta]

Certainly interesting ... after they sent me damaged goods, I certainly don't trust Luisa via Roma.

 

[GIVENCHYlover]

I always buy from Luisa and the price is different because the VAT is different.


Also if the country isn't in UE they will pay the taxes too, so the price will be higher.

 

[fashionista-ta]

By almost 2000 euros??

 

[VogueDisciple93]

It happens a lot with Airlines - some customers are charged/showed higher prices based on cookies. Even browsing from a Mac vs a PC could increase your airfare because you are perceived to be of better means. So clear those cookies/use private browsing next time you buy a ticket

 

[squilliam]

The way they talk about cookies is rather disturbing, it's like cyber stalking. They're trying to figure out what you'll buy and how much you're willing to pay? Some aspects of this personalized pricing seem too personal
I do think it might bring some overpriced designer goods down, so that's good

 

[GIVENCHYlover]

By almost 2000 euros??

In some countries you have to pay extra taxes for luxury goods, especially for furs and exotic skins...who knows



Almost everywere the cigarettes are expensive because the taxes are very high (80-90%)...so it's possible.

Let's be serious, it's an important site, they can's sell you a $1000 pair of shoes and after 2 hours the same pair for $600.

 

[Crying Diamonds]

Eurgh, the internet creeps me out further.

I hope I won't be charged more online now just because I browsed to see the retail price of the Bottega Veneta trainers I saw in the charity shop earlier

 

[fashionista-ta]

^ $10,000 for you