In a Real-Time World, the List Price Has No Relevance | RTInsights

The fabled standard price will disappear
There have been a number of lawsuits alleging retailers are engaging in deceptive pricing by claiming markdowns from an arbitrary “price list.” The issue was first highlighted in 2014, when a group of California district attorneys brought a false advertising suit against Overstock.com, accusing the online retailer of using misleading list prices. Michael Kors paid $5 million to settle a class-action suit challenging the prices offered at its outlet stores.

Amazon is now taking steps to stop listing manufacturers’ suggested retail prices. And where Amazon goes – we’re all going to follow. Plus with the FTC (Federal Trade Commission) investigating these strategies, the standard price will disappear online and for good.

That’s going to raise some big questions for retailers. That’s because getting online dynamic pricing right is one of the most difficult issues in online retail, because it is a major challenge to keep up with such a fast-moving marketplace. If the price is too high, the online shopper simply jumps to another site, if too low the online shop risks its profit margin, and as a pernicious side effect builds a customer base that expects huge discounts every time they shop.

As we know online shoppers like nothing more than comparing prices. Keeping prices on par with the competition is therefore extremely important to any online retailer’s ongoing strategy. Real-time, dynamic pricing adjustment based on changes in demand is the only solution that can satisfy online shopper’s continuous quest for a bargain. At the same time, pricing response time is critical.

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In a Real-Time World, the List Price Has No Relevance – RTInsights.