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They have ample means to do so: the immense data trail you leave behind whenever you place something in your online shopping cart or swipe your rewards card at a store register, top economists and data scientists capable of turning this information into useful price strategies, and what one tech economist calls “the ability to experiment on a scale that’s unparalleled in the history of economics.” In mid-March, Amazon alone had 59 listings for economists on its job site, and a website dedicated to recruiting them.
Jump up ^ Peterson, R. A.; Balasubramanian, S.; Bronnenberg, B. J. (1997). “Exploring the implications of the Internet for consumer marketing”. Journal of the Academy of Marketing Science. 25: 329–346. doi:10.1177/0092070397254005.
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We live in the age of the variable airfare, the surge-priced ride, the pay-what-you-want Radiohead album, and other novel price developments. But what was this? Some weird computer glitch? More like a deliberate glitch, it seems. “It’s most likely a strategy to get more data and test the right price,” Guru Hariharan explained, after I had sketched the pattern on a whiteboard.
The effect, now known as “left-digit bias,” had not shown up in lab experiments, because participants, presented with a limited number of decisions, were able to approach every hypothetical purchase like a math problem. But of course in real life, Nagle admits, “if you did that, it would take you all day to go to the grocery store.” Disregarding the digits to the right side of the decimal point lets you get home and make dinner.
You can find all the same kinds of things available at J.Crew, from your classic navy and white striped boatneck top to that gingham shirt that everyone seems to have, but my personal favorite items to scoop up are bathing suits (on sale, of course) and jewelry, which are affordable, unique, and stand the test of time. But keep in mind that returns aren’t free and many of the deeply discounted pieces are final sale.
Companies like General Motors found an up-front way of recovering some of the lost profit. In the 1920s, GM aligned its various car brands into a finely graduated price hierarchy: “Chevrolet for the hoi polloi,” Fortune magazine put it, “Pontiac … for the poor but proud, Oldsmobile for the comfortable but discreet, Buick for the striving, Cadillac for the rich.” The policy—“a car for every purse and purpose,” GM called it—was a means of customer sorting, but the customers did the sorting themselves. It kept the truce.
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A couple of months ago, I came to Dallas from out of state and purchased a $200+ rice cooker from KOMart home goods/small appliance store. I explained to the salesperson (young man) that I was from out-of-state, looking to purchase a rice cooker for my mom because hers was causing problems. He…
Jump up ^ Waldon, John (March 2015). “The Digital High Street 2020” (PDF). http://thegreatbritishhighstreet.co.uk/digital-high-street-report-2020. Department for Communities and Local Government. Retrieved 12 December 2016. External link in |website= (help)
In addition to online reviews, peer recommendations on online shopping pages or social media websites play a key role[39] for online shoppers when they are researching future purchases.[40] 90% of all purchases made are influenced by social media.[41]
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It may come as a surprise that, in buying a http://finance.asialogue.com/news/overstock-clearance-sale-company-stockclearanceguru-celebrates-successful-launch/0052164/ pie ingredient, you might be participating in a carefully designed social-science experiment. But this is what online comparison shopping hath wrought. Simply put: Our ability to know the price of anything, anytime, anywhere, has given us, the consumers, so much power that retailers—in a desperate effort to regain the upper hand, or at least avoid extinction—are now staring back through the screen. They are comparison shopping us.
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^ Jump up to: a b Huang, M (2000). “Information load: its relationship to online exploratory and shopping behavior”. International Journal of Information Management. 20: 337–347. doi:10.1016/s0268-4012(00)00027-x.
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