ARCHIVES: This is legacy content from before Marketing Dive acquired Mobile Marketer in early 2017. Some information, such as publication dates, may not have migrated over. Check out the new Marketing Dive site for the latest marketing news.

Walmart?s move to match Amazon deals spotlights mobile?s role in dynamic pricing

With Walmart?s pledge to match Amazon?s prices this holiday selling season, dynamic pricing is in the spotlight, emphasizing mobile?s role in impelling brands to change prices on the fly to attract online shoppers looking for the best deal.

Walmart, the world?s largest retailer, last week said it will enforce a price-matching policy in all its United States stores on prices from Amazon and other retailers as the crucial Black Friday season nears, Reuters reported. Including recent embraces of dynamic pricing by mobile apps-based taxi-hailing operations such as Uber, the developments point to mobile?s growing presence in shoppers? gift research and ordering and its power to influence retail strategies.

?Dynamic pricing isn?t new, with prices in the airline industry based on the premise of real-time, dynamic pricing for a while,? said Vanessa Horwell, founder and chief visibility officer of Miami-based ThinkInk. ?What?s different today is that consumers are searching in the mobile environment, not tethered to a desktop computer. 

?They?ll look on Amazon, see what the price is there, and then compare prices on their smartphones against other prices they find online or in stores as they?re shopping,? she said. ?As a result, marketers have to be able to price their products dynamically in response to the mobile, real-time environment.? 

Tracking search efforts

Walmart?s recent announcement makes items at its roughly 5,000 U.S. stores available for the same prices at which they can be found on Amazon, the largest Web-based company in the U.S. 

Uber?s Web site contains a notice stating that during times of intense demand, its rates will change periodically. 

A tradition of low prices.

In the dynamic environment, search engines are continuously tracking the items for which customers search. If consumers are looking for, say, Tonka trucks this Christmas, retailers will adjust prices to capitalize on customer interest. 

?As the interest in and demand for certain products goes up, the ability for a marketer to adjust prices at the moment becomes more important,? Ms. Horwell said. ?If they know that more customers are interested in that product, they can either reduce the price to clear out extra stock or raise the price to take advantage of the demand.?

Dynamic-pricing has already made a huge impact. It grew from about 25 percent of holiday purchases made on mobile devices in 2012 to 40 percent in 2013. 

The trend is expected to increase as consumers shift from the desktop to the mobile environment and marketers follow their lead.

Marketers who make the best use of vast amounts of available data are expected to enjoy the greatest success in deploying dynamic pricing.

A uniquely mobile use case for dynamic pricing might go like this, according to Bruce Hershey, vice president of mobile strategy at Vibes: A consumer walks in to a retail location, is asked to log in to the store?s wifi, download the mobile application or visit the branded site. The consumer starts to add items to the cart, scanning each item to ensure he or she is getting the best price. 

If the price is lower online or at another retailer, the brand he or she is shopping at provides savings. 

Following check-out, the brand shows the total savings and asks the consumer to join the loyalty program. The process builds confidence and the relationship with the consumer, while at the same time creating loyalty. 

?What is important is that brands like Walmart embrace the connected consumer and utilize their own mobile tactics to keep them buying products they love while in store,? Mr. Hershey said. ?If a retail brand can not just keep the consumer in the store, but get them to buy the products they want at a savings, the upswing will be not just a happy customer, but a loyal customer that will spend more.?

Walmart electronic receipt.

Dynamic pricing can be especially important to high-frequency retailers such as sellers of electronics, fashion, toys and travel whose product prices can change every few hours.

For some marketers it might make sense to adopt dynamic pricing at specific times of the year, such as during the competitive holiday season or in response to public relations or ad campaigns.

Dynamic pricing made an impact the moment consumers began to see their smartphones as essential to the shopping experience.

?The impact is critical to ecommerce, because ecommerce is now m-commerce ? a true shift from electronic commerce to mobile commerce,? Ms. Horwell said.

?Marketers have a competitive edge if they?re able to price products based on customer demand, to compete with what others are offering in the marketplace, and to know what consumers are searching for.? 

?Do marketers necessarily have to cut prices?? she asked. ?No, they can adjust them ? up or down ? based on real-time data and activity. That?s the biggest impact for marketers ? the ability to take advantage of mobile-empowered data and act on it in real time.?

Dynamic pricing is potentially a big ally for any marketer who offers a commoditized product ? that is, where the location of a purchase or a brand is irrelevant.

?If left competing on price alone, they will not survive,? said Aaron McLean, senior vice president of marketing and strategic partnerships with 

Reverse showrooming

Dynamic pricing could spur an epidemic of reverse showrooming, in which consumers use the Web to review prices online and then buy the item in-store where it is cheapest.

Amazon's low prices on mobile app.

?The paradigm in this evolving story, is mobile,? Mr. McLean said. ?Today and in the future, consumers will be hybrid showrooming.

?I?m already doing this every time I shop in the real world,? he said. ?I stand in front of a product in the store, and on my iPhone, look up the prices in my Amazon app, read reviews on the product, and compare prices. 

?If Amazon wins, I buy the product on Amazon while I?m still standing in the store,? he said. ?If the store wins, I walk home with the product that day.?

Final Take

Michael Barris is staff reporter on Mobile Marketer, New York.