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Restaurants already charge different prices in different locations (depending on country/state/city/neighborhood). Restaurants already have different breakfast

by paxys 3y ago

Restaurants already charge different prices in different locations (depending on country/state/city/neighborhood). Restaurants already have different breakfast/lunch/dinner menus with similar items but different pricing. Restaurants already charge different prices depending on whether you use a delivery service or order in person. Restaurants already do weekday discounts, late night/clearance discounts, and "surge pricing" for special event days. Restaurants already have coupons, "dollar" menus, loyalty cards and several other ways to implement price discrimination. Nothing about Wendy's plan is new or surprising.

meheleventyone 3y ago
I think the dynamic nature of surge pricing is the real difference. With all the things you list as a regular customer you have a reasonable chance of knowing about most of them and choosing when and where to spend your money. With surge pricing you just get unlucky.
jprete 3y ago
The difference between all of those other mechanisms and surge pricing is customer expectations and control. All of the discount systems you talk about are predictable, so the customer doesn't need to spend any energy re-evaluating the purchasing decision; they can decide once that they're a regular customer, a discount-only customer, or not interested. Surge pricing makes every single commercial interaction into a negotiated decision. The companies usually do it algorithmically so it costs very little; it's the customers who bear the brunt of the invisible transaction cost, by constantly forcing fresh re-evaluations of the transaction.
- tomjakubowski 3y ago
  Yeah, it's the asymmetry here of that cost that is the problem. Consumers could fight back if pricing data were as accessible to us as it is to retailers. Leveling that out is part of the datasette philosophy, I think. An important question is how to scale that up so there's a collective effort on consumer behalf to resist this.
  - randomdata 3y ago
    The only way to fight back is to cease being a customer. You don't need price information for that. How are you going to "fight back" with price data? If you shift your habits to buy when the price is low – that's what they want you to do! A restaurant is far more efficient (read: profitable) when there is a steady stream of customers all day long, rather than having nobody in the place at 3PM and then a flood of people at 6PM. If a lower price can compel you to eat at 3PM instead of 6PM, that's a win for them.
    - JohnFen 3y ago
      > The only way to fight back is to cease being a customer. You don't need price information for that. This is the approach I take. I don't think of it as "fighting back", though, as my goal isn't to change the bad behavior of companies. That's largely impossible. Instead, it's just a stance of pure self-protection. The only way I can protect myself against bad companies is to not engage with them at all.
deleted 3y ago
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fragmede 3y ago
Yes it is. Saying happy hour existed before this announcement so any kind of price discrimination is not new or surprising ignores the human psychology of it all. Yes, the math works out the same if I charge $5 normally and discount it $1 during happy hour, and if I charge $4 during happy hour, and surge price $1 all other times, but people don't like getting charged extra for things because it feels like they're being cheated. Saving money on the other hand feels like something good has happened. Saying oh but that's just feelings and emotions dismisses the fact that we're humans that have feelings and emotions. Emotions like surprise. This is surprising, because it feels like Wendys just announced "hey, we're going to go gouge our customers. Have fun you guys!" If someone wanted to get into PR and the business of writing press releases, this would be an example of what not to do. Of course this isn't a new thing, but you call it dynamic pricing, say it's cheaper during the lull, and never ever say the word surge. With one press release, Wendy's has earned itself a bunch of bad press, and a bunch of fanatics who will shit talk them at recruiter opportunity and boycott their restaurant because they couldn't be bothered to put out a really lame and boring version of the same thing - that they're spending $20 million to modernize their in-store menus.

by paxys 3y ago

meheleventyone 3y ago

I think the dynamic nature of surge pricing is the real difference. With all the things you list as a regular customer you have a reasonable chance of knowing about most of them and choosing when and where to spend your money. With surge pricing you just get unlucky.

jprete 3y ago

The difference between all of those other mechanisms and surge pricing is customer expectations and control. All of the discount systems you talk about are predictable, so the customer doesn't need to spend any energy re-evaluating the purchasing decision; they can decide once that they're a regular customer, a discount-only customer, or not interested. Surge pricing makes every single commercial interaction into a negotiated decision. The companies usually do it algorithmically so it costs very little; it's the customers who bear the brunt of the invisible transaction cost, by constantly forcing fresh re-evaluations of the transaction.

tomjakubowski 3y ago
Yeah, it's the asymmetry here of that cost that is the problem. Consumers could fight back if pricing data were as accessible to us as it is to retailers. Leveling that out is part of the datasette philosophy, I think. An important question is how to scale that up so there's a collective effort on consumer behalf to resist this.
- randomdata 3y ago
  The only way to fight back is to cease being a customer. You don't need price information for that. How are you going to "fight back" with price data? If you shift your habits to buy when the price is low – that's what they want you to do! A restaurant is far more efficient (read: profitable) when there is a steady stream of customers all day long, rather than having nobody in the place at 3PM and then a flood of people at 6PM. If a lower price can compel you to eat at 3PM instead of 6PM, that's a win for them.
  - JohnFen 3y ago
    > The only way to fight back is to cease being a customer. You don't need price information for that. This is the approach I take. I don't think of it as "fighting back", though, as my goal isn't to change the bad behavior of companies. That's largely impossible. Instead, it's just a stance of pure self-protection. The only way I can protect myself against bad companies is to not engage with them at all.

deleted 3y ago

[deleted]

fragmede 3y ago

Yes it is. Saying happy hour existed before this announcement so any kind of price discrimination is not new or surprising ignores the human psychology of it all. Yes, the math works out the same if I charge $5 normally and discount it $1 during happy hour, and if I charge $4 during happy hour, and surge price $1 all other times, but people don't like getting charged extra for things because it feels like they're being cheated. Saving money on the other hand feels like something good has happened. Saying oh but that's just feelings and emotions dismisses the fact that we're humans that have feelings and emotions. Emotions like surprise. This is surprising, because it feels like Wendys just announced "hey, we're going to go gouge our customers. Have fun you guys!" If someone wanted to get into PR and the business of writing press releases, this would be an example of what not to do. Of course this isn't a new thing, but you call it dynamic pricing, say it's cheaper during the lull, and never ever say the word surge. With one press release, Wendy's has earned itself a bunch of bad press, and a bunch of fanatics who will shit talk them at recruiter opportunity and boycott their restaurant because they couldn't be bothered to put out a really lame and boring version of the same thing - that they're spending $20 million to modernize their in-store menus.