Amazon’s Price Changing Machine
According to analysis by Profitero, a U.K.-based price intelligence firm, Amazon.com implemented more than 2.5 million price changes every day during the month of November. That dwarfs the just over 50,000 total price changes that were made by brick-and-mortar retailers Best Buy and Walmart throughout the entire month of November.
Profitero’s analysis also revealed that Amazon.com increased its number of daily price changes ten-fold over the last 12 months. In December 2012, the online retailer implemented just 269,113 price changes.
Profitero noted that with price the number one driver for value-conscious shoppers, Amazon is gaining a definitive edge by assuring competitive prices across its portfolio.
"Profitero predicts that the number of price changes is only going to increase as the retail landscape becomes more competitive, and so it’s impossible for any retailer to monitor this number of price changes manually," said Volodymyr Pigrukh, CEO of Profitero, in a statement.
ABC News had a reporter seek out the best price for a Bulova watch. The price dropped from $750 a little after 5 p.m. on a Friday to $510 at 6 p.m., then to $418 eight hours later at 1:00 a.m.
In an article earlier this year, the Financial Times noted that Amazon uses "robo-pricing," which utilizes some high-speed, algorithm-driven trading technologies used on Wall Street. This allows merchants to automatically undercut competitors by a predetermined amount. It found that prices on Amazon.com can change as often as every 15 minutes.
Such technologies likely helped Amazon.com offer a deal every ten minutes this past Black Friday week.
- Profitero Reveals That Amazon.com Makes More Than 2.5 Million Price Changes Every Day – Profitero
- How to Win Online Shopping Price Game – ABC News
- Amazon Changes Their Prices 2.5 Million Times a Day – redorbit.com
- Amazon ‘robo-pricing’ sparks fears – The Financial Times (subscription required)
- Amazon to Release Deals Every 10 Minutes During Black Friday Week – Amazon
How much of an advantage does Amazon gain with its continual price adjustments? How should brick & mortar and multichannel retailers respond? Where do you the use of robo-pricing going in the future?