Why surge pricing is coming at restaurants, online retailers and more

We have seen surge pricing impact the cost of our taxi rides. This piece in the BBC says that we need to get ready to see it elsewhere in our lives as well and not just in the online world: “The concept of dynamic pricing is simple – and easy for businesses to implement. “Surge pricing is directly linked to increases in demand. In periods of high demand, the scarce goods are more valuable, and companies can increase their prices,” says Arnd Vomberg, a professor of digital marketing and marketing transformation at the University of Mannheim Business School, Germany.

Perhaps the most well-known example of this is within ride-share companies, including Uber and Lyft…

Outside travel, online stores are increasingly using this dynamic pricing, too, says Vomberg. “On Amazon.com alone, millions of price changes occur within a day, corresponding to a price change of approximately every ten minutes for each product.”…

Now, surge pricing is happening within brick-and-mortar establishments including bars and supermarkets as well. “Physical businesses are adopting electronic shelf labels that enable real time price adjustments depending on the time of day, stock levels and whether items are approaching their sell-by date,” says UK-based Sarwar Khawaja, chairman of the Oxford Education Group. He says this technology is likely to cause prices in bars that use these signs to increase during the rushes of dinner, weekends or holidays, or for supermarkets to adjust prices throughout the day or week, depending on volume of shoppers.”

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