As I pointed out back in 2006, the concept of Dynamic Pricing has been around for at least 25 years. I first encountered it in Kevin Kelly's 1998 book, New Rules for the New Economy.
Five years ago, when I was consulting to a large UK supermarket, this concept was starting to be taken seriously. The old system of sending people around the store putting yellow stickers on items that were reaching their sell-by date was seen as labour-intensive and error-prone. There were also some trials with electronic shelf-edge labels to address the related challenge of managing special offers and discounts for a specific stock-keeping unit (SKU). At the time, however, they were not ready to invest in implementing these technologies across the whole business.
The BBC reports that these systems are now widely used in other European countries, and there are further trials in the UK. This is being promoted as a way of reducing food waste. According to Matthias Guffler of EY Germany, around 400,000 tonnes of food is wasted every year, costing German retailers over 2 billion euros. Obviously no system will completely eliminate waste, but even reducing this by 10% would represent a significant saving.
Saving for whom? Clearly some consumers will benefit from a more efficient system of marking down items for quick sale, but there are concerns that other consumers will be disadvantaged by the potential uncertainty and lack of transparency, especially if retailers start using this technology also to increase prices in response to high demand.
MaryLou Costa, Why food discount stickers may be a thing of the past (BBC News, 30 November 2023)
Matthias Guffler, Wie der Handel das Problem der Lebensmittelverschwendung lösen kann (EY-Parthenon, 28 March 2023)
See also The Price of Everything (May 2017)
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