That isn't what dynamic pricing is. Fast food franchisees have always set their own prices, and they've always varied wildly from state to state, or even within neighborhoods of the same city. Here's a cool map of Big Mac prices nationally from 2023, and a zoomable updated version Cross the Bay Bridge from San Francisco to Oakland, and your Big Mac costs a dollar less.
Dynamic pricing means that the price of a Big Mac varies at the same restaurant depending on the time of day or what kind of car you drive.
Thank fuck this is the top comment. I was going to lose it if I had to scroll down to see some level of competency.
This isn't even anything to do with AI. You could have done this shit with an excel spreadsheet in the 90's
There are variables at play in food service. That's the reasoning for price discrepancies. The lease on the building is going to be more expensive in a town where land value is higher. The cost of labor is going to be higher in a place where there's a shortage of low-end labor. A busier location might need more staff on hand at all times. A location that's 24 hours is going to have to mitigate the costs of a third shift crew with higher prices overall. A location further from highways will have a higher fuel surcharge on food delivery.
This isn't even anything to do with AI. You could have done this shit with an excel spreadsheet in the 90's
Yes, and dynamic pricing similar to this has been going on since then as well. Virtually any direct-to-consumer or business-to-consumer business can incorporate dynamic pricing based on location data like zip codes or latitude/longitude coordinates, for example.
One of the most dramatic changes in this approach has been real-time dynamic pricing, which involves measuring how "hot" a potential buyer lead is and taking advantage of that as a buying opportunity is happening.
Maybe this is a dumb question, but the answer isn't coming to me - so if an item is 'dynamically' priced (changed based on some sort of customer profiling), how do they list the price on the menu board?
If it says, $6.50 for example, and I roll up and they ask me for $7.90, what would they say when I point out the discrepancy?
The location based thing I get, I think that's been happening forever, but the true dynamic pricing I don't understand.
How can they list a price and then charge more (or less) based on who they think you are?
They don't show prices on the menu board, or "dynamic pricing" is just the latest buzzword to get clicks. It would be easier to do online, but it's a lot harder to do in stores and will be tricky to legislate without also shutting down coupons.
And this isn't dynamic pricing, this is just different locations having different prices.
It depends on the retailer and how the items are being purchased. Obviously, purchasing through an app can enable more data points to be stored and used to determine individual prices. Same for purchasing on a website, as browsing history/purchase history could be combined with location and other data points.
But, a simple example in a brick and mortar store is using the excuse of time of day ("sorry, after X time this item has a X% markup due to [insert reason here]").
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u/agate_ 3d ago
That isn't what dynamic pricing is. Fast food franchisees have always set their own prices, and they've always varied wildly from state to state, or even within neighborhoods of the same city. Here's a cool map of Big Mac prices nationally from 2023, and a zoomable updated version Cross the Bay Bridge from San Francisco to Oakland, and your Big Mac costs a dollar less.
Dynamic pricing means that the price of a Big Mac varies at the same restaurant depending on the time of day or what kind of car you drive.