In the restaurant scene, big changes are happening, and dynamic and surge pricing are becoming the new normal
In the restaurant scene, big changes are happening, and dynamic and surge pricing are becoming the new normal. A recent BBC article breaks down this shift, giving key insights for restaurant execs (source). Find out why this change matters for industry leaders:
What’s Happening:
Ever noticed how Uber charges more during busy hours? Well, restaurants, like Slug & Lettuce pubs, are adopting the same strategy. Almost half of UK consumers are catching on, with a third experiencing higher prices during peak hours (Barclays Survey).
How It Works:
It’s all about dynamic pricing. When demand surges, prices follow suit. Professor Arnd Vomberg simplifies it: AI and algorithms step in to help businesses adjust prices on the fly. This isn’t just online; even physical stores are using electronic labels to change prices based on the time of day and other factors.
Tech in Action:
Technology isn’t just playing a role; it’s changing the rules. Algorithms and AI empower businesses to adjust prices strategically, seen on platforms like Amazon where prices change every ten minutes.
Economic Realities:
In today’s economic rollercoaster, adaptability is key. Dynamic pricing isn’t just a cash grab; it’s a survival tool. It lets businesses offer discounts during rough patches and adjust prices when times are better.
Balancing Act:
While all this makes sense for business, there’s a catch. Charging too much, especially in beloved places, can make customers lose trust. Execs need to balance the strategy with what customers feel.
Summing Up:
As surge pricing becomes part of the restaurant scene, execs have a big decision to make. Dynamic pricing, with the help of tech, is a chance to not only stay afloat but also understand what today’s customers want.
Reference: Elizabeth Bennett, “Why surge pricing is coming at restaurants, online retailers, and more,” BBC, November 2, 2023
