Monday, August 6, 2018

Algorithms feeding unsustainable price cuts online

Retail Dive
While consumers and sellers alike may think that Amazon itself is driving price competition, it's now often third-party marketplace sellers, on Amazon and Walmart, that initiate price-based skirmishes, according to the report. Dynamic pricing algorithms have enabled retailers to detect every online price change, including temporary promotions, and that's, "leading to race-to-the-bottom behavior and permanent drops in Average Selling Price," Profitero said.

Consumers are benefiting and abetting the practice. Aided by their smartphones, 54% now habitually suss out prices, even shopping in store. And, while not as speedy as machines, they're now conditioned to not only search out the best online price, but also to wait for price drops, Profitero said.. . . more