Economics @ ITT

Instituting Price Discrimination

Posted in economics by ittecon on March 5, 2013

Safeway recently introduced a new personalized shopper program called “Just for U” which extends additional coupons and savings to the company’s Club Card holders based on their product interests and purchase history.

Safeway supermarkets leverages information captured through their loyalty programmes, offering deals for certain users. This is the opposite of what Orbitz did to Mac users. What is more interesting to me is that more ecommerce sites don’t do this. In the B2B world, it is common to offer negotiated contract pricing. Is it only a matter of time until the price I pay for a book or a shirt is different to the price you pay? Given exhibited behaviours, a business can get a better sense of price elasticity of demand and so can charge accordingly.

Ref Loyalty Pays Off for Safeway – Think customers: The 1to1 Blog.

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One Response

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  1. […] A nice article on price discrimination to follow up yesterday’s topic. […]


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