Airlines and hotels have been constantly adjusting prices for years, responding to customer demand and attempting to maximise profit. In a piece at the Wall Street Journal, Julia Angwin and Dana Mattioli explain that rapid price adjustments are spreading throughout online retail.
The competition is getting pretty intense. From the WSJ:
“The price changes can be dramatic. Last month, retailers on Amazon.com changed prices on a Samsung 43-inch plasma television four times over the course of a day, between $398 and $424, according to Decide.com. Around midday, Best Buy boosted the price to $500 from $400 before dropping it back down, while electronics retailer Newegg in the morning raised its price to $600 from $500.”
Competition between airlines and hotels is limited by routes and space. Online retail has hundreds of different sellers offering the same products, making for even more rapid fluctuation.
Mercent Corp., which provides software that tracks and changes prices, told the WSJ that it changes the prices on 2 million products an hour.
This is exactly why retail giants like Best Buy and JCPenney are struggling.
A savvy consumer can now wait for an online price war where Amazon sellers race to the bottom to get to the top of search results, and get the kind of deal that used to require a special sale.
It requires research and patience to take advantage, but a hundred dollar price difference is a powerful motivator that brick and mortar stores will have trouble replicating.