“It’s all about the data. Under the hood, the Amazon store has a few unusual features. Every book has a shelf tag that includes a capsule review from the website, a star rating, and a barcode. There are no prices listed. To get the price, you scan the code with the camera of your smartphone and the Amazon app. If you don’t have a smartphone or the app installed, an associate can do it for you. This brings up the product page for the item you’re looking at, with full reviews, specs and pricing.”
Price is the main motivating factor in most purchasing decisions under $50, so it’s interesting to see that Amazon is trading off that variable with the need to scan a code with its app on your smartphone in order to give you the information.
There’s a very good reason Amazon wants to do that, of course… if you have the app installed on your smartphone and use it in their store, they are able to (in relative real time) offer up a more customized, or personal, shopping experience to you based on what Amazon knows about you. If you’re online in 2015, that’s probably a good deal, especially for Prime members with Echo’s and a long purchase history like me and my family.
Variant pricing will initially surprise consumers. “What do you mean he gets to buy that Star Wars book for $2 less than I do?” will be a common refrain. Amazon knows my wife and I have a little boy due to arrive any moment now (or they should based on our recent purchases), and they know I’m a Star Wars fan based on my Amazon Prime Movies streaming, and purchase of toys and collectibles for our kids (*cough* … ) or the frequent amount of times our 5 year old asks Alexa to play the Imperial March from the soundtrack.
So, psychologically there’s a great deal more involved with a purchasing decision than price point.
As we move towards a cash-free and digital transaction based economy (thanks, Apple and Android Pay!) and continue to contribute both our data and our purchasing habits to recommendation engines, it will be more economically efficient to move towards a market where goods and services are based on context and situational awareness (Uber’s Surge Pricing, for example).
“Showcase Stores” such as Best Buy get this. Even the weekly grocery store discount ads in the newspaper circular (for us old folks) will follow this lead and require an app or an interface not based on universal pricing in order for the “cost” of something to be displayed. Our nearly automated financial markets full of nano-second timed transactions carried out by bots are already there.
Time for advertising and marketing to catch up.
It’s going to be a fun decade ahead.
“Hey Alexa, play my Beatles mix. And order more newborn diapers.”