Digital price tags and dynamic pricing, what are they?

Let's talk about this. As we're going into the holiday shopping season, you might see these guys. So a lot of people are noticing these digital price tags on store shelves instead of the traditional paper tags that we all know. So this technology allows the stores to use dynamic pricing. They can actually change the price of an item instantly with the click of a button based on factors like supply and demand. So we want to talk about this because a little concerning in our brick and mortars now. Let's bring in Mark Fetzer in. He's a marketing professor from Rollins College. I will say my alma mater here, Mark. Thanks for joining us this morning. How are you? I'm doing great. Thank you so much for having me. So, Mark, we already know that all these companies are watching our online shopping habits. But now the brick and mortars are watching us as well with these digital price tags. Well, so we need to differentiate between dynamic pricing and the different aspects to look at this and those price tags. The price tag is just something physically. so yes can they change it any second but i think the main motivation for having those price tags is mostly cost reduction right instead of a worker going and manually change all those tags and every day we know you know there are sales it takes them way too long and so the main motivation for companies is usually cost reductions versus dynamic pricing the main motivation there is increased revenues. But when you talk about dynamic pricing and supply and demand, let's say there's a whole lot of demand, right? And this thing is selling off the store shelves, whatever this thing is, could they then increase the price? So technically and practically, yes. We need to differentiate in two ways. You can look at dynamic pricing, right? Is the price based on the product the inventory and the market situation or is the price based on the person their location their you know purchase habits and the second way to look at is is is the price set by you know publicly available so is it transparent or is it not transparent and so when you look at dynamic pricing right what we all know and have been used to is the open pricing I call it, where, you know, airline seats, everybody has access to those. And yes, they do. They do change when the closer it goes to departure. I think the concern you're raising is the pricing relate to the person. Right. One of which is called surveillance pricing. And I think that's the big concern is like, do they raise the price just because of me or for the market situation? right and that's so you bring up a good point because so one of the things we've heard is that they have a way of like seeing like oh this person looks like they can afford to spend more right that there's like some kind of behind the scenes surveillance going on as we're googling or searching things is that something that you're seeing or is that something that maybe we're just a little wary of well i think there are valid concerns when you know especially now with AI and data analytics right where they have more and more some people say we're up to 5,000 data points companies have on our you know search history facebook activity instagram all the social media so obviously i think the key is you know the the more they know about you the more they could technically exploit you and i think there are some laws into place where i think there's the protection from predatory pricing act you know so i think some states are trying to address the potential issue of discriminatory pricing based on that person's, you know, shopping history, for example. All right, Mark, we really appreciate you coming in today and explaining these digital price tags to us. Do you think we need to be a little bit concerned before the holiday season or maybe have certain strategies with these things? Well, dynamic pricing can also go both ways, right? So if you think, you know, Black Friday and Cyber Monday, that's dynamic pricing, too, but in a good way for the consumer. You know, most of the time they have huge sales. So I think it really depends on the situation and how company use this ethically or not ethically. Well, that's the question, right? Yeah, that's right. It's fascinating. It really is. Absolutely. Veteran marketing professor from Rollins College. Great to see you again, Mark. And we enjoyed having you. Thank you so much. Have a great day. You do the same and we see it all over. We see it in travel. We see it in other industries too. So now it's on our grocery shelves.