{"id":147601,"date":"2024-02-28T09:41:30","date_gmt":"2024-02-28T14:41:30","guid":{"rendered":"https:\/\/webapp2.wright.edu\/web1\/newsroom\/?p=147601"},"modified":"2024-02-28T10:17:26","modified_gmt":"2024-02-28T15:17:26","slug":"raj-soin-college-of-business-professor-quoted-in-usa-today","status":"publish","type":"post","link":"https:\/\/webapp2.wright.edu\/web1\/newsroom\/2024\/02\/28\/raj-soin-college-of-business-professor-quoted-in-usa-today\/","title":{"rendered":"Raj Soin College of Business professor quoted in USA Today"},"content":{"rendered":"

Excerpt<\/strong><\/em><\/p>\n

\"\"Hit the bar during happy hour or your favorite restaurant for that early bird special and\u00a0save money\u00a0on drinks and food.\u00a0Slash the cost of that Hawaiian or European vacation by booking a flight or a hotel room early or during the off-season.<\/p>\n

But the same supply-and-demand principle can work against you. You pay more for electricity during peak hours, for Bruce Springsteen\u00a0concert tickets\u00a0or even a parking spot when there’s a sporting event. And, of course, there\u2019s the infamous Uber surge pricing.<\/p>\n

While not new, surge pricing \u2013 or dynamic or variable pricing as it\u2019s typically called in the business world \u2013 is fast becoming the norm.<\/p>\n

What is surge pricing?<\/strong><\/h3>\n

More fast-food joints, restaurant chains and brick-and-mortar retailers are taking advantage of technological advances to tap into real-time trends and swiftly adjust prices, sometimes in seconds.<\/p>\n

It\u2019s a tempting proposition for big businesses that can dramatically increase revenue with slight pricing changes.<\/p>\n

Wendy\u2019s is the latest to say it will\u00a0fluctuate prices of chicken nuggets\u00a0or a classic chocolate frosty based on demand.<\/p>\n

During a conference call earlier this month, Wendy\u2019s CEO Kirk Tanner said the fast-food chain would experiment with dynamic pricing as early as next year.<\/p>\n

Wendy’s surge pricing<\/strong><\/h3>\n

\u201cBeginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and daypart offerings, along with AI-enabled menu changes and suggestive selling,\u201d he said. \u201cAs we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase, further supporting sales and profit growth across the system.\u201d<\/p>\n

The response on social media has been mixed.<\/p>\n

\u201cIf I ate at Wendy\u2019s, I\u2019d sit in the drive thru waiting for the surge pricing period to end,\u201d commented one consumer on the social media platform Threads.<\/p>\n

Not everyone is mad at Wendy\u2019s. \u201cLots of other businesses adjust prices based on demand,\u201d commented another.<\/p>\n

What\u2019s clear: The days of fixed prices that began in 1876 when a Quaker merchant introduced price tags at his department store in Philadelphia may soon be behind us.<\/p>\n

Research and advisory firm Gartner predicts that by 2025, the top 10 global retailers will use\u00a0dynamic pricing\u00a0to take advantage of mismatches between supply and demand.<\/p>\n

Prices seesaw all the time on the sites of online retailers like Amazon that use algorithms and artificial intelligence to monitor competitors and glean insights into individual shoppers, adjusting prices depending on interest in the product or in the brand, said Timothy Webb, an assistant professor at the University of Delaware\u2019s hospitality and sport business management program.<\/p>\n

Coupons and other offers are also routinely dangled in mobile apps to encourage people to make purchases.<\/p>\n

\u201cA lot of this stuff is already happening even if you don\u2019t realize that it is happening. If you have the Starbucks app and I have the Starbucks app, we probably have different offers,\u201d Webb said. \u201cWe might not be in the drive-through and they just increased the prices, but we are already paying different prices for the same products.\u201d<\/p>\n

But, he says, Wendy\u2019s fans will likely see moderate, not massive, price swings during periods of peak demand.<\/p>\n

\u201cIt\u2019s not like $200 or $300 on a flight. This is a hypercompetitive industry. If Wendy\u2019s goes up $2 to $3 on a burger at dinner time, I would be shocked. People have too many options. They will just walk down the street and eat at Burger King instead,\u201d Webb said. \u201cThere will just be little price changes here.\u201d<\/p>\n