Variable pricing is a brand’s worst friend. Pricing, one of the 4 Ps of marketing, is something that shouldn’t be messed with. Typically, brands are categorized by consumers as value, competitive or pricey. Brands can drop their prices for things like trial and loyalty – but a price strategy that consumers can’t grok over time is not helpful. Catalina and a few other marketing companies are helping brands and retailers use variable pricing on hand-help devices in stores – and it’s a shiny new thing. If you tend to like healthy foods, your store visit might push a special price to you in the cereal aisle. That price might be $1.00 less than your neighbor in the same aisle. Part loyalty, part promotion, the insight driving this tactic is really the 80-20 rule. 80% of a product is purchased by 20% of the consumers. So finding more repeaters is a smart goal. Just not sure this is the way to do it.
If variable pricing takes off and product costs changes weekly, it will have a negative impact on brand loyalty. It will create complexity where none is needed. There are much better things to do with mobile devices me thinks. Peace.