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When a holiday toy catalog from Amazon arrived in the mail in late October, Krista Hoffmann realized that something was wrong.
The catalog featured 100 pages of Lego sets, princess castles, action figures, and pretty much everything except prices on the hard-to-find Sony PlayStation 5.
“At first I thought I hadn’t looked closely enough, so I turned a few more pages,” said Ms. Hoffmann, a mother-of-three who lives in Colorado Springs. “Then I realized, ‘Oh, that’s intentional.’ Why don’t you put the prices there?”
The absence of prices was not an oversight; It was the natural evolution of twenty years of online shopping.
In the early days of the internet breathless excitement He said e-commerce will lead to greater price transparency and let shoppers know exactly where to find the best deals. This is supposed to be good for consumers and bad for retailers, who have to compete with each other in a profitability-killing race to the lowest prices.
Instead, another fact emerged: Shoppers overlook the cost of things.
Retailers have an incentive to push the lens away from prices, shaking off other carrots like convenience and ease of use. At the same time, shoppers are increasingly overwhelmed by the complexity of product choices, prices, discounts and payment plans.
Beyond that, being a consumer is not an easy time. The epidemic has changed shopping habits. The scarcity of everyday items like toilet paper and disinfectant spray was a bitter reminder of the fragility of supply chains – an issue that consumers still grapple with, who face delays for everything from furniture to cars. It has increased energy, food and housing costs, contributing to price volatility, exacerbated by inflation at its highest levels in four decades.
All this happens on a system pioneered by Amazon that keeps prices in motion based on algorithms.
When Amazon raises and lowers product prices millions of times a day using a complex algorithm based on competitors’ prices, supply and demand, and shopping habits, competitors often do the same. And because prices change so frequently, Amazon’s catalog cannot promise a specific price, and consumers have to follow the fluctuations if they want the best deals.
Glenn Ellison and Sara Fisher Ellison, professors of economics at the Massachusetts Institute of Technology, 2018 article published While tech products have made it easier to search, retailers have hidden prices and pushed back – often a harbinger of higher prices.
“The more confusion there is, the more consumers pay for everything,” said Glenn Ellison, adding that consumers spend time looking for opportunities or choose an alternative that isn’t exactly what they want. “Almost entirely negative for consumers.”
Ms. Hoffmann, 29, said this statement, which was “almost entirely negative”, showing her feelings about holiday shopping.
“I had to scan each item individually and hope the prices didn’t fluctuate when comparing them to other stores,” he said.
Amazon price, Pokemon Celebrations Elite Trainer Box, a wish list item for Mrs Hoffmann’s 7-year-old son, who was on the seesaw in the weeks before Christmas. Since August, there have been at least 14 changes, ranging from the suggested retail price of $49.99 to $89.99 in October. It averaged $67.12 during this period. camel camelwhich follows the prices on Amazon.
When she realized there were no prices, Ms. Hoffmann Why was he questioned on Twitter?. An Amazon customer service account responded right away, explaining that prices are constantly changing as Amazon “strives to maintain competitive prices on everything we carry.”
Speaking about pricing practices and price volatility, Amazon spokesperson Patrick Graham said the company’s systems compare prices at other stores to ensure customers get the best price from Amazon.
“If we find a better price at another retailer like Walmart, Target, Home Depot and others – we’ll systematically match or offer a more competitive price if we’re selling the product ourselves,” he said.
Like many of the other toys on Ms. Hoffmann’s children’s wish list, the Pokemon box offered directly by Amazon has been sold. Some third-party sellers who paid Amazon to list products on its website were charging exorbitant prices. So Miss Hoffmann bought a different box of Pokemon cards from Target on Black Friday.
Dynamic pricing (when prices move with market conditions) is just one reason people lose touch with the cost of things.
Discounts tied to loyalty programs or annual subscriptions like Amazon Prime and Walmart+ also complicate the math. At the same time, features aimed at saving time and increasing convenience, such as automated monthly household goods deliveries, have made shoppers less price-conscious.
“The general playbook for retail and the post-2000s is that it’s all about surprising prices,” said Jason Murray, who worked at Amazon for 20 years and is now CEO of the company. boat, an e-commerce venture. “This is the game companies play by removing benchmarks to make people think they are getting a good price.”
Retailers and brands bombard shoppers with discounts, one-time offers, and different tricks while also giving the impression that they’re getting a good deal. And even when price comparison is easier and more common, such as for airline tickets or hotel reservations, consumers can’t get a full picture of the true cost due to additional fees.
“We’ve been flooded with such a flood of prices and numbers that it’s hard for any particular number to really stay constant,” said author and author Nick Kolenda. Creator of YouTube videos about consumer psychology and the tricks marketers play to encourage shoppers.
The prices of some goods, such as gasoline, a cup of coffee or a gallon of milk, are easier to remember because people buy them regularly and in person. When shopping online, the picture can become hazy – but the experience may not be universal, especially for people living with limited means.
“Losing track of prices has a lot to do with how sensitive a particular household budget is,” said Chi-En Yu, who runs Goodbudget, a budget tracking app. “If your home is highly sensitive to the prices of consumer goods, then you can’t afford to overlook prices on some level.”
It can also indicate Richer consumers tend to shop more online. Unlike physical stores, where prices can be troublesome to change, the internet provides the perfect sandbox for experiments on exactly what consumers are willing to pay.
in 2000, Amazon has reacted when found to charge different prices for the same DVDs only a few minutes apart. (Amazon received $65 from one customer for the “Planet of the Apes” DVD and $75 from another customer.) Jeff Bezos, the CEO of Amazon at the time, apologized for creating buyer uncertainty with a “random price test.”
While Amazon says it doesn’t apply discriminatory pricing – charging different people with different prices based on demographics – it all boils down to dynamic pricing. Profitero, an e-commerce analytics firm, estimated that in 2013 Amazon changed prices 2.5 million times a day. (It’s safe to assume that the number is increasing.)
As a result, household goods prices are swaying back and forth and are occasionally subject to price hikes that are more common with ride-hailing services.
“The problem today is you have no idea if prices are going up or not. It’s like the stock market,” said Venky Harinarayan, partner at venture capital firm Rocketship.vc. He was an early employee at Amazon and helped Walmart with pricing technology.
Even paper towels are subject to Bitcoin-like volatility. A year ago, a 12-roll pack of Bounty paper towels was selling for about $30 on Amazon, according to Camelcamelcamel. The price dropped to $23 in April and then rose to $35 in October. It settled for around $28 last week.
For opportunity-hungry shoppers, time spent shopping online and avoiding stores has been replaced by time spent researching the internet for a bargain.
Ravi Dhar, a behavioral scientist and professor at the Yale School of Management, said the transition to a cashless economy also reduces the psychological pain of paying. Digital payments and credit cards make transactions so seamless that people lose consciousness of their spending.
by 2009 research paper Prices go up when people use less cash, according to Amy Finkelstein, an MIT professor of economics. Dr. Finkelstein studied what happens when states introduce electronic toll collection. After enough drivers installed toll readers in their cars, tolls became up to 40 percent more expensive than they would have been if cash only was accepted.
Dr. As part of her research, Finkelstein said that at a rest stop on the Massachusetts Turnpike, she asked drivers how much they had paid at the toll booth they had just passed. It found that 85 percent of those paying electronically got the price wrong, compared to only 31 percent of those paying in cash.
Dr. “People paying electronically had no idea what they were paying for,” Finkelstein said.
Even for price-conscious shoppers, it’s getting harder to keep tabs.
“The average person won’t know what the right price is, what to spend, what to buy and when,” said Mike Stouber, 32, of Freehold, NJ. one will neither notice nor pay attention.”
Mr. Stouber, vice president at a communications firm, is no ordinary price-conscious shopper. It’s a ringtone.
On “The Price Is Right” in 2019, took $262,743 home, the most money ever awarded to a daytime competitor. She took the stage with the closest estimate of the price for a diamond tennis bracelet. Then, in a game called Plinko, he correctly predicted the prices of hair dryers, humidifiers, and video game consoles to win even more cash prizes. (He couldn’t guess the correct price of the digital meat thermometer.)
These days, Mr. Stouber is playing a different game with prices fluctuating on Amazon. She ordered shower and sink fixtures for her bathroom remodel from Amazon in February last year. A month later, when he noticed that the prices of the products were significantly cheaper, he contacted the company to see if he would refund the difference – as other stores do.
Amazon refused. So he returned the fixtures and repurchased them at a lower price. As an Amazon Prime customer, shipping was free and saved $80.
“Consumers want a deal and companies want to find a way to get the most money from you,” said Mr. Stouber. “It’s a game. It’s really just a game.”
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