The price is right! Amazon targets the right price to the right user, and you do not know… yet 🥸
Consumers are getting an incomplete picture of online prices because of overwhelming information and ad hoc prices because of time, behavior, or even age.
At first, e-commerce would lead to price transparency for consumers and force retailers to compete in a profitability-killing race for low prices. But actually, technology has been developed to improve vendors’ revenues.
Have you felt you don’t know whether prices are going up or down? We all feel obfuscated because of all the changing prices and online options. We will see what companies use to make us believe we are making a good purchase.
- Overwhelming visuals 👀: Online marketing uses more images and friendly descriptions to reduce price exposure. Sometimes the visuals and information are so overwhelming that price is not a dealbreaker.
- Few items left 🤌🏽: Companies show scarcity of some products, increasing the urgency to buy soon, making it more difficult to compare other options or wait for another time.
- Complicate the math 😳: Discounts, coupons, and similar products comparison create anchor pricing, so consumers believe that this price is ok, but they are not comparing within the same ecosystem products.
- Prices change to each individual 🥸: Companies discriminate prices against each type of consumer. Users with historic high-ticket purchases see higher prices than users who are more sensitive to prices. The algorithm is so complex that prices change even moments apart.
- Looks easy to buy 🤡: eCommerce reduces the psychological pain of paying. Saving the credit card information or buying with a click reduces all frictions in the user journey, making users lose awareness of their spending.
Those techniques are migrating to brick-and-mortar stores. Whole Foods, purchased by Amazon for $13 billion, is the first big experiment. Hundreds of cameras with a god’s-eye-sensor monitor every consumer behavior in the store, itemize the products and charge without going to any cashier.
The next trend will be to use technology to give purchase power to consumers, improve price and quality transparency, and reduce shady companies’ strategies.
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