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back to article IBM introduces fleecing-you-as-a-service for retailers

IBM has introduced a new cloud service it calls “dynamic pricing” that says a lot about where online retailing, IBM and its relationship with partners is going. Dynamic pricing is conceptually simple: if you run a web store, IBM will now scour rivals price lists for you and offer recommendations about what you should charge. …

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  1. Mark 85

    I'm wondering if Amazon has this, or something similar built in. If I'm looking for something and find it on Amazon, I'll pop out of the page and trip over to a couple of other places (including brick and mortar) to check. Many times, when I come back, the price has changed. If I leave the Amazon window open, no price change.

    2 0 Reply
    1. Tom Samplonius
      Reply Icon

      "I'm wondering if Amazon has this..."

      For at least the past 5 years, probably more. Another way to verify dynamic pricing, is to use the private browsing mode, and compare private browsing mode to your regular mode. In the past, Amazon would offer the best price to new customers, and somewhat worse pricing once you were a regular customer. Their dynamic pricing has probably gotten much more sophisticated since then.

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      1. Steve Davies 3 Silver badge
        Reply Icon

        Easy way to check

        Browse for an item via your laptop/desktop (yes I know that these are supposedly going the way of the Dodo).

        Then a couple of hours later do the same operation from your Phone/Tablet.

        I found a 12% price difference (the Phone was lower) on the Item I was looking for at the time (an Anvil).

        0 0 Reply
      2. Anonymous Coward
        Reply Icon
        Anonymous Coward

        In the past, Amazon would offer the best price to new customers, and somewhat worse pricing once you were a regular customer.

        Not just Amazon. Hotels do this all the time, but often very crudely, so that if you make multiple visits to their web site they'll hike the price offered to you, so you've triggered the dynamic price hike, not total demand. Luckily because its crude you can usually book using a different browser on the same machine, or use a different machine.

        I suspect that offering retailers the prospect of "free money", dynamic pricing will become ever more frequent, until it becomes so abusive that regulators intervene. Particularly if you start setting your new price base purely on competitors pricing, then that could easily be seen as collusion, leading to vast fines. In some sectors where supply is fixed in the short term, it has been used for years and will always be used (like air travel and hotels). But I'll wager that dynamic pricing of commodity retailing will be accused of somehow being socially exclusive, and it'll become more and more difficult to sustain. Once the mainstream press get hold of it, it'll become a bone to gnaw on, and those choosing to use it will need to consider if the additional margin is worth the reputational grief.

        2 0 Reply
    2. batfastad
      Reply Icon

      To check price history of items on Amazon I can recommend http://camelcamelcamel.com

      0 0 Reply
  2. Youngone Silver badge

    Sale! Now on!

    As far as I'm aware, everyone assumes that the sale price is just the normal retail price.

    5 0 Reply
    1. Jason Bloomberg Silver badge
      Reply Icon

      Re: Sale! Now on!

      And "up to 50% off" applies only to items no one wants or the store does not actually have.

      2 0 Reply
  3. Anonymous Coward
    Anonymous Coward

    A few cents like let's say

    25 on a dollar it's still a serious price raise.

    0 0 Reply
  4. LaeMing
    Flame

    I don't know about anyone else...

    ...but the main reason I bail on a site with a full shopping cart is either that

    1) the checkout is broken, or

    2) the checkout is asking for onerous and unneccessary personal information to complete the transaction (though that is really a special case of point 1 above).

    12 0 Reply
    1. Anonymous Coward
      Reply Icon
      Anonymous Coward

      Re: I don't know about anyone else...

      How about numbers 3 and 4:

      3) the retailer refuses to ship to the place where you live (and naturally the list of countries where it does ship is available in the 3-point, non-resizeable text, at the end of a 20-level deep maze of hyperlinks).

      4) the shipping cost is 5x the price of the item you wish to purchase, and is reavealed at the very end of the 15-minute checkout process, after you fill out the form asking for the maiden name of your family dog, and the burial location of your first childhood pet.

      Admittedly, these are still special cases of your #1.

      8 0 Reply
      1. aBloke FromEarth
        Reply Icon

        Re: I don't know about anyone else...

        or of course that b'stard number 5:

        5) onerous credit card fees that appear out of nowhere. I'm looking at you, event and travel websites.

        7 0 Reply
    2. cantankerous swineherd
      Reply Icon

      Re: I don't know about anyone else...

      going to the checkout is the only way to find the actual price being charged. having found out you proceed or abort.

      10 0 Reply
    3. paulf
      Reply Icon
      Unhappy

      Re: I don't know about anyone else...

      "And if users are bailing out before they buy, leaving a full virtual shopping cart at the checkout, you'll know that too and be offered ways to stop it from happening."

      Ebuyer already detect this even when I'm not signed into their website which makes for some serious questions about how they know it's me. Yes I know Cookies but if I'm not signed in they're guessing/assuming its me.

      Once I did leave a small £10 item in the basket as I didn't need it immediately and figured it would wait a week or two. They emailed me daily to remind me it was there until I deleted it from the basket and bought it from Amazon.

      So perhaps a #6 - the buyer hesitates before going to the checkout but then empties their basket and goes elsewhere when they realise a sales assistant has been following them them whole time and has suddenly started hassling them to go to the Checkout.

      0 0 Reply
    4. a_yank_lurker
      Reply Icon

      Re: I don't know about anyone else...

      I wonder how truly price sensitive people are in that they are so concerned about a couple of cents difference between any two retailers. Personally, price is only one factor along with the service, reputation, and my own experience with the retailer. IBM (itsy bitsy morons) is probably using an overly simplistic model of consumer behavior. Most shop a short list of retailers whom they have learned what to expect from them both online and brick-and-mortar.

      1 0 Reply
  5. Christoph

    Watch out for bugs

    There was a case where two sites were selling a rare book. One had an automated process to set the price slightly less than the rival's price. The rival had an automated process to set a price a bit higher than the first's price (probably with the idea that if they got an order they would buy it from the first and resell at the higher price).

    Site 1 saw site 2's higher price and nudged their own up a bit. Site two saw site 1's higher price and nudged their own up to retain the margin. Site 1 saw this higher price ...

    A few days later the book was priced at some insane value - many hundreds of pounds.

    2 0 Reply
    1. Doctor Syntax Silver badge
      Reply Icon

      Re: Watch out for bugs

      That might explain the occasional stupid price from some Amazon & eBay sellers although I'm still inclined to blame finger trouble.

      0 0 Reply
    2. John Brown (no body) Silver badge
      Reply Icon

      Re: Watch out for bugs

      "A few days later the book was priced at some insane value - many hundreds of pounds."

      Similar hiccups in automated stocks and shares trading have been blamed for unusual fluctuations in prices on the stock market too.

      It's all well and good one or two make a killing with automated systems but once there's a few in the same ecospace, bugs in the algorithms or unexpected conditions where the same or different ones come into conflict can quickly cause a meltdown.

      0 0 Reply
    3. Frumious Bandersnatch
      Reply Icon

      Re: Watch out for bugs

      two sites were selling a rare book

      There's a similar story (in reverse) told about two groceries that were in competition with each other.

      They got into a price war with one another. Shop A started selling bread for 1 credit. Shop B responds by selling at 0.95 credits. Goes on for a few rounds, and each time shop B is sure that shop A can't beat his price any more, the price goes down again.

      Eventually one of them decides they're losing too much money on the war (selling too far below cost) and calls a truce. He asks the other guy: "how did you manage it? I couldn't buy bread for below X credits. How did you manage it?" The reply: "I was buying it at your shop"

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  6. VinceH

    " And if users are bailing out before they buy, leaving a full virtual shopping cart at the checkout, you'll know that too and be offered ways to stop it from happening."

    So it's "solving" a problem that is already better solved another way: Logging.

    * User visits site, starting a new unique session

    * User visits various product pages, all logged for that session.

    * User adds something (or some things) to their basket: All logged.

    * User follows through and purchases - logged.

    When you analyse those logs, if you see an abnormally high number of cases where people are putting things in their baskets and not following through and purchasing, you think about why.

    Mind you, with so many sites using third party analytics services (often multiple), and an increasing trend now for comments on news sites also being dealt with elsewhere, and probably other examples I can't think of, I suppose farming out every last byte of data to an "as a service" service provider is inevitable.

    (And even more likely to 'enpoor' the web for those of us who use NoScript and similar.)

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  7. PyLETS

    Be afraid. Be very afraid - and disclose as little as possible

    The ultimate triumph of big data as used for dynamic pricing will be when the price of a flight to a conference at which you are a keynote speaker, and on which your professional reputation depends, is the value of your professional reputation if there is only 1 carrier who can get you there on time. That's because every bit of your personal data has been sold to the operators of the dynamic pricing computer as needed to know that the airline has you over a barrel.

    Of course this will have to be stopped before that kind of event can happen through data protection law improvements and regulatory restrictions against price gouging, but it will be a political struggle to stop the current tide going in this direction even if it doesn't make it to that endpoint. We're seeing an equally anti-social kind of price gouging in effect already in the gas and electricity markets in relation to how customers too vulnerable or busy to switch are being screwed.

    0 0 Reply
  8. John Styles

    Ha ha

    "But just how the world's niche software developers find a way to market when the likes of IBM and Microsoft are building vertical applications is anyone's guess."

    Have you SEEN their vertical applications?

    1 0 Reply
  9. Anonymous Coward
    Joke

    Who will protect us from this IBM BORG?

    What an effront to our egalitarian market driven consumer led economy. Allowing a retailer to dynamically adjust prices in real-time depending on market conditions. Who will protect us from these neo-facist corporate overlords?

    0 0 Reply
  10. Holleritho

    So just like Uber

    That old surge pricing: sell high when commodity is scarce, lift the price until the pips squeak, drop only when you have to.

    Even black cabs do this, albeit just the day and night prices, and these are fixed.

    0 0 Reply

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