2024-03-14 12:00:37
The use of artificial intelligence in our daily lives seems to be taking up more and more space; it is now arriving in the catering sector. Goodbye to everyday fixed prices, hello to burgers at 12 euros at lunchtime compared to 5 euros at 4 p.m. So, do you think it’s a good or bad idea? The fast food chain Wendy’s seems to have decided for us, since it will implement this system from 2025 in its establishments.
The rationale behind this decision? Dynamic pricing, which the chain hopes, will fill its restaurants more during off-peak times and thus attract more customers. In short, dynamic pricing is a model that involves adjusting the prices of a product or service based on demand, competition, and several other elements. So, depending on the day, the time and the crowds, the prices are different. The price of the burger is therefore more or less expensive, depending on the time of day and the number of people. However, today there are already special offers close to dynamic pricing such as “happy hours”, fixed price menus, regular price menus or even reduced prices for children. In summary, the objective Dynamic pricing aims to help restaurants increase their revenue during off-peak periods.
Is this also a solution that would make it possible to regulate traffic during rush hour and thus make lunch or evening meals more pleasant for customers? Who wouldn’t mind paying more in exchange for peace of mind? Bernard Boutboul, de Gira, emphasizes that it is an excellent idea and does not understand why the restaurant did not think of it earlier: “It would encourage customers to come at low times”. And for the seasoned restaurant observer, the technique should work both to decrease and increase an average price. “Why wouldn’t people pay more at a very busy time like Saturday evening at 9 p.m. or certain lunchtimes during the week? “.
This practice of increasing prices during times of high influence is already practiced in many areas like the SNCF, UBER, the Tourism Industry or even for plane tickets. For example, Uber Eats uses surge pricing to increase delivery fees during peak times when demand is high. This incentivizes drivers to work during busy periods and ensures that customers can still receive their food quickly. Recently, Beyoncé pioneered this practice in Belgium by pricing her concert tickets based on demand. Result ? Some tickets reached €2,000. Others had already joined the strategy, such as Harry Styles, Drake, Taylor Swift, Kanye West and Paul McCartney.
Reluctance to face this new practice:
“When people are hungry, they want to eat right away. If the price is higher because it’s rush hour, they’re not going to wait for it to go down. They will go to the competitor”commented John Zhang, professor of marketing at the Wharton School of Business at the University of Pennsylvania. While Neil Saundersdirector at GlobalData, specifies that “Experimenting with the price increase is interesting but it risks exasperating customers and sowing confusion, particularly among regulars”. In addition, some experts note that it would be counter-cyclical if it involves selling more expensively during peak hours while fast food players are working on accessible offers to boost attendance.
In a context of high inflation, are we therefore heading towards the end of the single price, with variations depending on hours, days or store formats? It is clear that the phenomenon of “dynamic pricing” inevitably raises many questions.
Source :
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