Product Price Changes: Good, Bad or Just Ugly? - Indix



Product Price Changes: Good, Bad or Just Ugly?

Sale, deal, discount, save, low price – all words that we love to hear when it comes to the products we buy. Whether it is a high involvement purchase like a television or something low involvement like toothpaste, we enjoy the tiny little victory of saving some money. But where does the chase end? We’ve heard about the millions of daily price fluctuations on Amazon. As commerce becomes pervasive and it’s more and more about products being presented to us rather than us seeking them out, will price as an attribute change its inherent nature?

Consider this deal chasing exercise I went through recently. Sometime during the holidays last year, I was at a Macy’s store looking for a blanket. There was a sale in the bedding section. A gorgeous Calvin Klein duvet cover in a calming lavender-gray caught my eye. The color of the duvet cover was calming, but the process of buying it, not so much! It was listed at about $285 and on sale post-discount and extra “special” discount for $120. I try to resist the temptation of impulse purchases so I didn’t buy it. Over the next few weeks though, I really regretted my decision because now Macy’ said that the duvet cover was for $285. Yikes!

I became slightly obsessive and was going back to Macy’ over and over again to check if I would get that same deal. What I discovered was a specific pattern in the pricing of that and all duvet covers on Macy’ During the week, the products are sold for full price. No enticing discounts. Come the weekend, whether it’s a holiday or not, Macy’s will start running deals. Here are some screenshots of the duvet cover I wanted with their price over the past few weeks.




I grabbed the screenshot for the King size cover by mistake on February 28, but the price of the Queen then was $169.99 as is shown in the last screenshot – discount on top of discount with extra discount. Today, the price is back to $285. Needless to say, I grabbed the deal on Sunday as the final price came down to $120, the same price it was during the holidays.

The question is – Where and what is the logic behind this pricing? Macy’s has some kind of a conditional price matching policy that is hidden somewhere in the customer service section, not explicit at all. I wasn’t in a hurry to buy the product. I knew it would go back to its heavily discounted $120 at some point. I waited and got my reward. I would have been so mad at myself had I bought it for $285.

The point is not to attack Macy’s. This is just one example from my experience. There are tons of retailers out there who do the same thing and lose sales and customer loyalty in the process. Although I waited for the low price before making a purchase, a race to the bottom is not what commerce is about anymore. As a consumer, I want the right price. I really loved that duvet cover set. I would have paid the asking price if I knew that the product wasn’t going to be sold at that super ridiculous low price as well. It’s about the right product at the right price. As personalized and contextual pricing trends are taking off, these discount-driven pricing strategies will certainly take a backseat.

We already saw retailers like REI boycott Black Friday last year. Heavy and unexplained discounting frustrates shoppers, cuts margins for retailers, and can harm the brand’s relationship with its patrons. It’s not sustainable. Personalization and context will play a significant role in pricing as commerce becomes increasingly pervasive. We’ll explore these issues further through later posts. For now, what is your take on pricing and discounting?

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