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Retail price wars now take place in real time
Price wars have entered a new era of speed and precision, creating a confusing landscape for shoppers in which online prices leap and plummet on short notice.
The New York Times
The day before Thanksgiving, Amazon.com was offering a discounted price of $49.96 on a popular Xbox game, the same price as Wal-Mart and 3 cents lower than Target.
Then the holiday pricing shuffle began.
Amazon dropped its price on the game, Dance Central 3, to $24.99 on Thanksgiving Day, matching Best Buy’s “doorbuster” special, and went to $15 once Wal-Mart Stores offered the game at that lower price. Amazon then brought the price up, down, down again, up and up again — in all, seven prices changes in seven days.
The unluckiest buyer paid more than triple the price that the luckiest buyer paid.
Retail price wars have entered a new era of speed and precision, creating a confusing landscape for shoppers in which online prices leap and plummet on short notice.
In the old days, merchants sent employees into competitors’ stores to check on pricing, and days later “sale” signs reflected new markdowns. Now, sophisticated computer programs accomplish the same goal online within hours, and even minutes.
The battle was fierce over the holiday weekend. At the request of The New York Times, the pricing firm Dynamite Data tracked prices at three major online retailers — Walmart.com, Amazon.com and Target.com — starting the week before Thanksgiving and going through Tuesday, after most heavy promotions ended.
The data shows that retailers paid close attention to competitors’ online prices and in-store specials, battling to undercut one another by as little as 2 cents and forcing each other into out-of-stock positions as they pushed prices down.
“There was definitely some gamesmanship going on,” said Diana Schulz, chief executive of Dynamite Data, which tracks online-retail pricing, stock status, ratings and other information for clients such as Samsung and Abt Electronics.
While Seattle-based Amazon has long tinkered with prices, its competitors are fighting back. In the last year, Wal-Mart invested heavily in pricing tools, said a Wal-Mart e-commerce spokesman, Dan Toporek.
The goal is to attract shoppers with competitively priced products that show up on Web searches, but there is risk, too: Some consumers tire of price whiplash.
“People are starting to realize, ‘I can’t trust the price I’m getting, because it might change,’ ” said a pricing consultant, Rafi Mohammed.
Shoppers have few ways to game the system — ordering the same product at different prices requires expensive return shipments — but Mohammed said retailers had an opportunity to soothe consumers by offering refunds for price adjustments.