Personalization has come to dominate the world of online retail. Whether retailers are delivering more targeted marketing messages or providing custom product recommendations, personalization has permeated every stage of the customer journey. Some retailers are even experimenting with personalized pricing, which involves providing different product prices to different users, based on data like location, browser, and past shopping behavior.
While this may seem like an effective way to ensure maximum profits, Rafi Mohammed cautions retailers against this approach. Pricing strategy consultant and author of “The Art of Pricing: How to Find the Hidden Profits to Grow Your Business and The 1% Windfall: How Successful Companies Use Price to Profit and Grow,” Rafi has found retailers run the risk of damaging their brands by offering different prices for the same products.
“Amazon was caught doing this in the early 2000s,” explains Rafi. “It offered different prices to different customers based on their user data. It was well documented, and it caused an uproar. Amazon did eventually say, ‘We will never do this again.’ It’s unfortunate that retailers are making this same mistake.”
In this podcast, Rafi explains a better way for retailers to optimize pricing without angering their customer base.