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Will Electronic Price Labels Tempt Stores to Try 'Dynamic Pricing'? (yahoo.com) 221

"Electronic shelf labels are already common in Europe," reports the Los Angeles Times, "and will become wider spread in the U.S., with Walmart planning to implement the labels in 2,300 stores by 2026." And grocery giant Kroger also plans to introduce digital labels.

But will they also bring "dynamic pricing", where stores raise the price of ice cream on hot days — or jack the cost of water and canned goods before upcoming storms? Kroger and Walmart said they have no plans to implement dynamic pricing, and added that electronic shelf labels will only be used to help lower costs. "Kroger's business model is to lower prices over time so that more customers shop with us," a Kroger spokesperson said. "Any test of electronic shelf tags is to lower prices more for customers where it matters most. To suggest otherwise is not true." A Walmart spokesperson said updates to the electronic tags will be used to reflect lower prices for items on sale or final clearance. Prices will not change throughout the day, she said...

Grocery industry analyst Phil Lempert said the digital tags will help save time and money amid a labor shortage, but they could lead grocery chains down a slippery slope. "If you can make it electronic you can take a lot of costs out of the system, and that's great," Lempert said. "But once that's installed, and regardless of what any retailer is going to say, it's now easy to change prices."

Santiago Gallino, a professor specializing in retail management at the University of Pennsylvania, said he hasn't seen signs that retailers plan to use electronic shelf labels for surge pricing. "In my conversation with retailers, it's clear that those who are pushing towards this technology are mainly trying to drive efficiency up in the stores and try to reduce costs," Gallino said. "Grocery retailers operate on very thin margins, so every time they find technology that can help them save in labor, they will do that."

What grocery stores save in labor they may lose in customer trust and loyalty, however, said Dominick Miserandino [CEO of the retail disussion forum RetailWire.] "Consumers are exceptionally skeptical," he said. "When most of the consumer reaction to any product seems to be overwhelmingly negative, it's probably a product that one might want to reevaluate quickly."

The article notes one U.S. presidential candidate has already pledged they'd "work to pass the first-ever federal ban on price gouging on food."
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Will Electronic Price Labels Tempt Stores to Try 'Dynamic Pricing'?

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  • I only want discounts by flashing blue lights - not saving 2% by shopping on off-hours so stores can level their labor costs.

    Somehow that would be terrible, I'm told.

    • It does help to read the summary; would help you understand why it's bad...

      "where stores raise the price of ice cream on hot days - or jack the cost of water and canned goods before upcoming storms?"

      It's not discounts at off-hours, or even about discounts in general.
      • by Marxist Hacker 42 ( 638312 ) * <seebert42@gmail.com> on Sunday August 18, 2024 @09:04AM (#64715678) Homepage Journal

        There is nothing wrong with raising prices when demand goes up. It is in fact the rational thing to do.

        • Re: (Score:3, Insightful)

          by Kokuyo ( 549451 )

          I think I know where you think you're coming from but all I can say is that your system basically makes disasters purge events for the poor.

          • by Samuel Silverstein ( 10475946 ) on Sunday August 18, 2024 @10:45AM (#64715922)

            I think it's more likely to hedge against panic buying than anything else. I would have been all in favor of raising the price on things like hand sanitizer and toilet paper during covid if it would have done nothing more than stop people from buying way more of it than they needed.

            • That's the excuse they may come up with but the real reason is to make more money. Just like the people who buy products and then sell that on for a large profit. People are not going to be swayed from panic buying by a 2 or even 3 times increase in the price of toilet paper, what is the more likely outcome is they will think it will cost even more tomorrow so they better buy it today.

          • I think I know where you think you're coming from but all I can say is that your system basically makes disasters purge events for the poor.

            The alternative is that they're purge events for everyone who doesn't or can't immediately run to the store. Without adjusting prices to match demand what you get is empty shelves. Is that really better?

        • 'Marxist Hacker 42", you forgot your /s tag
    • I only want discounts by flashing blue lights - not saving 2% by shopping on off-hours so stores can level their labor costs.

      Yeah. People, specifically headline writers, are getting their panties in a twist. Could stores do something annoying such as adjusting prices based on time of day, individual purchase preferences, or outright racism? Sure. And customers would abandon that store in droves. Plus, we have lots of evidence stores who already could do this don't. Amazon is famous (or infamous) for experimenting with dynamic pricing and I'm pretty sure they abandoned the practice. If Amazon isn't doing it (and neither does Kohl'

      • Amazon has not abandoned the practice. If you look up anything that is on "same day prime shipping" on two different phones, the prices will be different. Sometimes by pennies, sometimes by 10-15%.

        • Amazon has not abandoned the practice. If you look up anything that is on "same day prime shipping" on two different phones, the prices will be different. Sometimes by pennies, sometimes by 10-15%.

          Thanks for clarifying. Amazingly, people still buy from Amazon. Apparently this is an acceptable practice.

          The good news is we have choices. I could buy from Walmart or Target or Etsy or Home Depot any number of other vendors if I didn't like Amazon's offer.

  • How and why? (Score:3, Informative)

    by guruevi ( 827432 ) on Sunday August 18, 2024 @06:57AM (#64715370)

    The first thing would be that people notice and stop shopping there. Groceries are an extremely competitive arena with profit margins of 0.5-1%. The second problem would be that your competitors would notice and undercut you on those days and advertise - hey, if it is hot, we actually give you a discount.

    Brand loyalty is rather fickle in this space.

    • There are competitors?

      I had a Kroger, Albertsons, and an independent store within economical distance. The independent one closed and the other two are now Kroger-Albertsons.

    • The first thing would be that people notice and stop shopping there.

      Right up to the moment their competitors do the same thing. Remember when only some stores were forcing self-checkout on people because they said it would save them money? How long did it take for every store to force self-checkout on people?

      The second problem would be that your competitors would notice and undercut you on those days and advertise - hey, if it is hot, we actually give you a discount.

      No. No they won't. If it's going to be

    • The margin on groceries in the US is not .5-1%. Some items (especially milk in all states but PA) will consistently be priced at this margin or lower, but on average, itâ(TM)s closer to 2-3% for store brands outside the fresh food departments.
      • Actually, my family has mostly worked in grocery markets for decades, and the net profit margin in a well-run market is at most 2%.
    • by dvice ( 6309704 )

      > The first thing would be that people notice and stop shopping there

      We have (electronically) changing prices in my local store. Every day the price can be different, I rarely go twice the same day, so I don't know if prices are changed even more frequently.

      I don't see see it as a problem. If the price is too high, I don't buy that product unless I really need it and I don't want to go hunting for cheaper shop. Usually I look for some alternative product in the same shop. There are some products that I b

  • Wrong reasons (Score:3, Insightful)

    by vbdasc ( 146051 ) on Sunday August 18, 2024 @06:58AM (#64715372)

    What consumers need to be wary of is not price changes day per day. Where I live, this is standard practice, and electronic labels are still a thing of the future. Electronic labels may enable pricing per customer however, and this must not be allowed to happen.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Electronic labels may enable pricing per customer however, and this must not be allowed to happen.

      How? There are no sensors in these labels that can detect what customer is close by. And even if it was, how would that work? It is still the same bar code that is scanned when I exit the store, whether I do it, or the clerk does it.

      • Even without an app, there is a whole marketplace of technologies to identify a shopper by their cell phone noise or the RFIDthe in the first product they picked up. Wireless, Bluetooth and 5G all identify a unique hardware address that can be linked to individual and a shopper profile much more complex than a credit rating and income class. Extending what happens at all the online retailers down to the brick and mortar is a 50 billion dollar industry worldwide. Selling the fat kid with dollars in h
    • What consumers need to be wary of is not price changes day per day. Where I live, this is standard practice, and electronic labels are still a thing of the future. Electronic labels may enable pricing per customer however, and this must not be allowed to happen.

      Here that ship sailed long ago and every grocery chain has pricing per customer since well before my time with loyalty cards and coupons, now apps.

    • Electronic labels may enable pricing per customer however, and this must not be allowed to happen.

      Regarding that concern..the ironic part about those abusing the masses with viral clickbait is that tactic can absolutely be used against them. I say to Greed, go ahead. Charge 100 customers all different prices and see what happens when THAT news, goes viral. Wouldn’t be surprised if a store owner didn’t find an intact store building by morning.

      Corruptly raising a lot of other costs in life is bad enough (cars, insurance, houses), but if you want to know how to start the actual revolt, keep

      • Charge 100 customers all different prices and see what happens when THAT news, goes viral.

        You mean like was known 19 years ago [findlaw.com]? Or how Amazon does [bayourenaissanceman.com] on a regular basis?

        Here's an entire article [influencer...inghub.com] about dynamic pricing on Amazon from five days ago.

        Let us know when people throw a fit over this and stop buying from Amazon.

        • Let us know when people throw a fit over this and stop buying from Amazon.

          First off, there’s a premium you can charge for convenience. So that can be assumed with any online retailer delivering to your doorstep so you don’t have to leave the house.

          But perhaps the most obvious point with Amazon pricing, is that no matter how “dynamic” it gets, it STILL manages to either meet or beat store prices, or justify the convenience.

          What do you think keeps Amazon in business? Prices, or convenience? People are lazier than ever. That’s fact, not theory.

    • Electronic labels may enable pricing per customer however, and this must not be allowed to happen.

      I'm curious why you say this. Yes, it might be irritating as a consumer but put your and my personal feeling aside for a moment. Why exactly must this not be allowed? Prices get adjusted per customer in all sorts of other contexts (mostly big ticket items like cars, home renovations, legal fees, and the like). What makes groceries different? What's your ethical, moral, or legal basis for saying this would be bad?

    • Electronic labels may enable pricing per customer however, and this must not be allowed to happen.

      Is that even legal in the USA?
      It's highly illegal here in my Eastern European country.
      With one exception, though, you can get discounted prices if you use the store app - but that is not discriminatory, because everyone can qualify if they wanted to.
      Price jacking because I seem more well-off than others, though? Highly illegal.

      Besides, I'm curious how would that even work in practice.

      • With one exception, though, you can get discounted prices if you use the store app - but that is not discriminatory, because everyone can qualify if they wanted to.

        Having seen "just for you" coupons in Lidl's app from the UK to Russia's border and anywhere in between I'd say to get of the "not happening in my European country" high horse.

        • 1. It's a very generic "just for you".
          2. It's not discriminatory if everyone can get access to discounted prices, if they meet some conditions.

          It is, however, illegal to raise prices just for some people.

          • Generic? It includes for sure among many other things AT LEAST:
            - if you are older than X or younger than Y
            - if your birthday is within a certain interval
            - if you are buying a certain amount of whiskey, Pampers or crayons
            - your postal code
            - the specific shops you shop at, the times and frequency, how much you spend

            It can't get more selective than that.

            • "For sure"?
              Nevertheless, to address your points:

              "- if you are older than X or younger than Y": Yes, laws allow discounts for seniors as well as for children and students, but for ALL seniors, children or students, whenever there is public access. Discounts, not price hikes. Big difference.
              "- if your birthday is within a certain interval": Never seen that. There are birthday discounts in some places, that's true, but last I checked EVERYONE has a birthday, therefore EVERYONE is eligible, once per year. Not d

    • Agreed. Customer dependent pricing is very concerning because it will require everyone to waste time demonstrating their personal price sensitivity. Someone who just grabs the first item they see will find their prices rising until they reach the point of pain and the customer is forced to price compare. The result will be additional lost time for no net economic gain.
    • Electronic labels may enable pricing per customer however

      No they can't. That's not how they work. And if you did try and vary price depending on who happened to be standing closest not only would someone notice it (and then claim the cheapest price on checkout since that's what the law requires be provided), but it would also very quickly run the batteries on these things down and be an absolute financial disaster.

  • Continuous rapid expansion of the money supply (inflation) by irresponsible central banks is probably another reason vendors want to use electronic price indicators (tags). They have to keep raising prices in order to maintain profits on each sale. My question is this, what is the customer to do if the price happens to get raised during the time between putting the item into their shopping cart, and checking that item out at the register? The customer might be in for a surprise!
    • If they really want to raise prices during opening hours they can have some generic warning that prices are valid for one hour (or whatever time) and activate them in the register only after that time. Or they can have some clear time windows when they change them, like from 7PM we're changing the prices for drinks.

      • If they really want to raise prices during opening hours they can have some generic warning that prices are valid for one hour (or whatever time) and activate them in the register only after that time. Or they can have some clear time windows when they change them, like from 7PM we're changing the prices for drinks.

        Might even be a good sales tactic. "Government mandates requires us to tell you that the price for this item is going up soon! Buy it now, quick!"

    • In Norway several chains use e-ink price tags, and raising prices only happens outside of opening hours. Lowering prices can happen at any time.

      Sure, requires the stores to play ball but itâ(TM)s a good principle. If stores fuck around, legislation will easily harmonise behavior so as to protect consumers.

    • Continuous rapid expansion of the money supply (inflation) by irresponsible central banks is probably another reason vendors want to use electronic price indicators (tags). They have to keep raising prices in order to maintain profits on each sale.

      Yep. Grocery stores have super low profit margins. Despite Kamala's tactic, the people to blame for your high food prices are not the grocery stores ...

  • by dfm3 ( 830843 ) on Sunday August 18, 2024 @07:21AM (#64715414) Journal
    In several states are already suing Walmart and Dollar General for not charging customers the price shown on shelf tags, which is probably the reason for the "prices will not change throughout the day" comment. Surge pricing, if it changes from the time you pick up the item to the time you get to the register, might actually be illegal. I am good with numbers and have a habit of keeping track of prices as I shop, and at some stores it's probably 70% of the time that I notice the price at the register being higher than the price on the shelf. I always bring this up when it happens and it always creates a huge headache for the store staff, which is EXACTLY my intent!
    • There are two grocery stores here and Walmart. I've abandoned one of the grocery stores because it consistently charged higher prices at the register than listed on the shelf label. When confronted they always backed down, but why put up with it?

      But with electronic labels the cashier can press a button and the label will instantly update to the price on the receipt. The customer will never win a price check again unless you take a time stamped picture of the label of every item you buy.

    • If the price changes after the time of the "offer" and "acceptance' (price is read, then the customer puts the product in their cart) and before the time of payment, then the seller is committing the definition of fraud in Canadian law. There's case law on it, if you're interested in suits: https://www.canlii.org/en/on/o... [canlii.org]
    • I could see a good use of this being to lower prices during off peak hours in order to shape foot traffic a little better. If they use it to jack up the price for surge pricing, they will lose as much of my business as humanly possible.

      So, discounts to encourage a better customer experience == good. Price gouging to just be price gouging == bad.

      That's my two cents.

       

    • by jonwil ( 467024 )

      In Australia if a retailer advertised an item at a certain price (say in a TV ad or a catalog) but charged a higher price for it, they would be in trouble under false and misleading advertising laws (and there would absolutely be action taken by the ACCC as the relavent regulator). If a retailer has a different price on the shelf to what you pay at the checkout, there are rules around that as well.

      There are retailers who have started using e-ink price tags but none of them (that I have seen) do anything dod

  • ... of remotely update-able price-tags.

    Captain Obvious strikes again!

  • Why not ask if it's a good idea to have the crack head guard the crack, the question isn't if they'll abuse the customer, the question is when. The technology itself is a good idea, and the application to dynamically update price tags is a good idea, but does anyone think that this will be responsibly used?

    Depending on how you update these displays, you could possibly hack them, and due to pricing laws, save a lot of money. In Canada, the price shown / advertised is what they have to give you. This m
  • by stasike ( 1063564 ) on Sunday August 18, 2024 @07:57AM (#64715498)
    Here in Europe if you pick up goods from a shelf marked with a price they MUST sell it to you for that price. You can call the state operated Consumer protection agency to enforce that right.
    So, if I pick something from a shelf that has a price tag 3Euro they can't change it to 4Euro on my way to pay for the item. They would have to close the store to change the prices.
    And, we already do have those fancy electronic price labels here in grocery stores.
    • False they must sell it to you for the highest of a discrepancy between prices. No they don't need to close the store to change prices. And here's the thing: Supermarkets have been changing prices during work hours for over a century. Your legal quandary is trivially resolved by adding a small delay - say 20min, to the price update and the checkout becoming more expensive, or no delay if it becomes cheaper. Even old people on walking frames don't spend 20min in supermarkets.

  • ... ban on price-gouging on food.

    The words could be the meaningless promise of an election campaign but saying the USA needs goodwill regulations, reveals the country to be backwards.

    Other countries already have limits on marking-up essential foods and on changing prices. But that doesn't stop all price-gouging: IIRC, during a banana shortage, retail prices in one country were US$8/kilo while the wholesale price barely changed. (Wholesale price was set months before the shortage happened, and farmers have to sell, they have no leverag

  • And you know why you chose those words.

  • Here in Saskatchewan, Canada, Wal-Mart is already using eInk electronic tags in some areas of the store. This means they don't have to print out reams of paper tags and have staff members walking the aisles to change them. And because of the way they are designed, the eInk tags get a long, slow refresh cycle over the period of a day, as they're all battery operated and using the 432MHz or 915MHz frequency band for short-length, low bandwidth signalling

    With frequent updates for things like "surge pricing", i

  • by nospam007 ( 722110 ) * on Sunday August 18, 2024 @08:53AM (#64715644)

    ...is a fickle bitch.

  • are already electronic labels.
  • Gas prices at the pump can change several times a day. This is not a new phenomenon, and it's driven by replacement cost of inventory.

    Look it up, and don't complain to the convenience store clerk, they merely rent space for the pumps and the petro company drives the price. Or the convenience store rents space from the petro landlord and handles sales for commission. Either way they make nothing to very little on gas. That 24 oz soda they charge $1./39 for is a profit item, though every other item is inflating so fast it's demoralizing.

    • by jomcty ( 806483 )
      <quote><p>Gas prices at the pump can change several times a day. This is not a new phenomenon, and it's driven by replacement cost of inventory.</p></quote>

      This happened to me whilst I was pumping gas, the price increased on the digital signage out front, but I was locked in on the price it was when I began pumping.
  • Dynamic pricing is honestly kind of evil and that's why we need gov regulation in this case. However, there's a very simple solution. Make the retailer liable for a massive penalty TO THE CONSUMER for any price differences. You advertise a can of soda for $1, but it's a hot day and the price is $1.25?...Give the consumer that proves a price mismatch $1000. Or even worse...you walk into the store, pick up a 12 pack for $5, shop around for 15 min and the price increases...well...if the consumer can prove
  • Understand that grocery stores replace prices on goods CONSTANTLY.

    I work in the label industry. One of our larger customers got to be as huge as they are by specifically designing printers and label systems solely for grocery stores. As they explained to me, a larger grocery store would COMMONLY reprice everything about every 2-3 days. A single large grocery would have 8-10 laser printers in the back running 24/7 churning out new shelf label tags.

    So understand, the ability to change prices instantly IS A

  • The guy from Kroger admits that they intend to use electronic price labels to increase profits. He spins their evil plan as lowering prices for customers but that means there is a higher MSRP and they will be discounting overstock, old, stale food at slow times of the day and for people of less means. Everyone else will pay the high price.
  • It's common for restaurants to change prices, like at 5pm when they switch to the "dinner menu", which does change up a lot of what's available, but some things that were on the lunch menu are still on the dinner menu but at a higher price for exactly the same food and portions.

    There are lots of other examples of "dynamic pricing". All this really is doing is making it easier for them to change prices when they have tens of thousand of products on the shelf. This isn't a problem, it's a symptom, of the hi

  • Except itâ(TM)s the other way around. Stores charge a high price by default (manufacturers suggested retail price) and add a variable discount.

  • Wouldn't shop at a store that installed this technology.
  • When I buy things like sour cream, one brand will be $ per ounce and the other will be $ per lb ... it should be a legal requirement to get these to be consistent, or show all the variants. Yes, I can multiply/divide the prices, but after a long day at work my brain is fried and I don't feel like doing math on every item. In Europe some store will actually flag which brand, or off brand, will have the best deal. This is how you fight inflation.

  • All of their stock has an epaper tag on the shelf. The system also is tied into an app, so if you search for an item it will tell you the row and location within the store. It even blinks to make location easier. Also with their app they'll tell you exactly how many of the item is there or direct you to store that has it if its out of stock.
    As with everything good, there is bad (for the consumer). The prices can be changed dynamically, thus if new stock arrives at the store the tags price is updated rem
  • That has been a primary driver behind the technology for almost 2 decades.

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