Guest Column | October 10, 2012

Are Retailers Ready for Demand Pricing?

By pcAmerica

Can you imagine having a business that changes prices every day or even every hour?

Actually, we do it now.

It used to be that you could go up to the hotel desk and ask for a room. The advertised price for the room may be $300. If you come in with your family, the clerk would tell you that the room is $150. If the clerk remembers you, the clerk may even give you the room for $100. If you were a businessman in a suit, the clerk would tell you that the room was $300 since your boss was probably paying for the room. And, if you were a government worker or politician, you would be charged $500 for the same room.

Now all the room haggling is done by computer.

The best time of day to get a hotel room or airplane ticket is 3 PM to 6 PM. The hotels and airlines know that many businesses reserve their rooms and flights in the morning.

Hotels and airlines have the computers programmed to change prices according to the time of day as well as number of rooms or seats available at a particular time  or date.

It's called on demand pricing.

Many retail stores and restaurants use on demand pricing. Retail stores raise or lower prices according to the time of year and demand for particular items. Add to that, all the sales and marketing in the month prior to Christmas.