Saturday, September 16, 2000

Amazon tries out 'customized pricing'

Knight Ridder News Service

        WALNUT CREEK, Calif. — Is the day coming when Internet retailers change their prices based on how badly you want something?

        A recent pricing test at raises the question of just how far e-retailers will take personalized pricing. The giant online seller had been offering customers different prices for digital versatile discs (DVDs). The price changes were random, Amazon insists.

        But with the ability to track what customers have bought and whether they've been comparison shopping, and then change prices on their sites, Amazon and other e-tailers have some pricing muscle. Analysts say it's likely they're going to start using it.

        “I have no doubt that it can be very effective for retailers, and I think we're going to see a lot more of it in the future,” said Erik Brynjolfsson, co-director of the Center for eBusiness@MIT.

        Some Amazon users question whether the site altered its DVD prices based on how it identified a customer. Don Harter, an assistant professor of computer and information systems at the University of Michigan Business School, studied the prices over the summer and found that, depending on the Internet account and Web browser he used to enter the site, the price of The X-Files — The Complete Second Season — could cost from $80 to $100.

        Shoppers started to detect similar disparities, and by the beginning of the month DVD Internet chat boards were filled with slams against Amazon.

        Amazon insists the price changes had nothing to do with browsers or buying history and were only “a very brief test to see how customers respond to various prices,” Amazon spokesman Bill Curry said.


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