A few weeks ago, when I was in Tokyo, I happened upon a camera store selling just what I was looking for, at a price that was simply too good to refuse. However, the more advanced model was also on sale. This left me with a conundrum: to be satisfied with my original choice, or to go one better. I told myself not to be greedy and stuck with my original choice. But it kept niggling at me. So just as soon as I’d finished work the next day, I went back to exchange for the bigger, better version.
Imagine my surprise when I got there and found both cameras had gone up by 10%. Indignantly, I demanded to know why. Politely and patiently the sales staff simply explained: “Time of day, sir.” I took a breath, looked around and noticed crowds of other shoppers stopping by after work before heading home.
Seasonal price variations are not new. We are well aware of peak and off-peak travel times. Families who want to get together around Christmas, Easter and Thanksgiving expect to pay top dollar for air tickets. Retailers also know that our price sensitivity varies across the day, week, month and year. Sometimes, we enter a store determined to find a bargain. Other times, like when we’re in a hurry, we couldn’t care less.
But increasingly, the retail world is becoming so sensitive that it can react to — and create — hour to hour price fluctuations on consumer goods. Have you noticed that those traditional printed price tags on the shelves of supermarkets and big-box stores like Costco and Wal-Mart are being replaced by digital pricing displays? You probably assumed this was for the sake of efficiency, which it is in part. But it’s also so that they can respond to shifts in commodities markets — coffee beans, oranges — in a matter of moments. Similarly they are changing their prices to accommodate fluctuations in the store’s traffic. Supermarkets, for example, have peak shopping times. Swing by a store at 6 p.m. and it will be jammed. Stop by at 11 in the morning on a weekday and it will be nearly deserted (except for maybe that elderly couple buying a cantaloupe.) In slow times, prices drop, while in busy times, prices rise.
(MORE: Monkey See, Monkey Buy)