SVP - Food, Hospitality & Retail | Innovating ops with AI, automation & offshore labor for Restaurants, Retail, Tech, Multi-Units | Bestselling Author | Co-Founder | Board Member |Tech Thought Leader
Every food delivery from a Doordash or Uber Eats is dynamically priced. The delivery costs change the price in the bottom right corner for every guest. The Wendy's Company backlash & subsequent move is just a reactionary move to quell the insatiable desire of journalists trying to clickbait a story. Wendy's never used the term 'surge' pricing. Surge only makes sense when the resource is finite. There is always an alternative restaurant to choose from. However, providing better #value and #service is what guests demand today. The busiest times of a restaurant are when the most 'issues' occur with an order, the times when delivery takes longer (reducing quality & temp) & some restaurants manage this by 'shutting off' or limiting delivery orders. They are closing their digital doors - which is also a mistake. Paying 50c more for an item that is high in demand AND getting a great experience IS about providing more value. Similarly paying 50c LESS but eating an hour earlier (5pm) or later (9pm) is giving the guest the choice to derive value from a more economic angle. Restaurants can choose which lane works best or both. Note - these views don't are not representative of my former business & are my own. Advanced #revenuemanagement in restaurants is growing and the data will speak for itself once sensationalistic headlines subside.
Kristen Hawley
9mo
I'd like to push back a bit on journalistic clickbait claims, which I believe are misplaced. Mass media and consumer media outlets are just that: mass and consumer. Coverage in mass outlets lacks the nuance that industry insiders and specialists understand because the average consumer doesn't understand it, either. In these cases, invoking a term like "surge pricing," which is what I assume you're alluding to with claims of clickbait, is a way to position the concept so readers and viewers understand. As I'm sure you know, the dynamic pricing news was pulled from an earnings call meant to update analysts and investors. A proper headline draws readers into a story. This does not make it clickbait. If anything, this is an excellent example of the disconnect between decisions made in corporate offices and the way they're received by the public.
Therese Foutz
9mo
Incredible insight and really great talking points to consider.
This is great thinking and I fully track with your logic. I don't disagree at all with the benefits to the restaurant. I also understand how it benefits the guest, to an extent. So far, the messaging around it simple lands in a nickel-and-diming perception and in this world, perception is reality. I think dynamic pricing has a bit of a PR problem, but also has a problem in general. No one wants to pay more. Especially right now. No matter what the reason. So, selfishly, if the dynamism was a decrease in pricing in slow times, the headlines would be supremely more positive. Maybe that means raising prices to the ceiling and mitigating the traffic-based reductions? I've heard others bring up airlines and ride share as examples of it working. I can tell you from first hand experience that i've learned to use incognito mode to stop airline sites from increasing flight costs while I do research on which flights are best.
Ashwin Kamlani
9mo
There is no need to "announce" the implementation of dynamic pricing. This became loud and clear after The Stonegate Group faced similar backlash in the UK after announcing a small increase in the price of beer on weekends and during special events. The fact is, restaurants are already doing it and it works beautifully. When done correctly, the restaurant is more profitable and consumers are happy. The data will do the talking, not the media spin.
Beau Anderson
9mo
As a consumer, I don’t notice if the Big Mac is $6.09 or $6.49. When I want a Big Mac, I’m going to order a Big Mac. Likewise, if I go to a fancy night out with my wife, and I want the lobster that’s “market price” I order it. Im not asking what it was last month. #dynamicpricing or #revenuemanagement could drastically help an industry that struggles to make $0.10 on the $1. You could also use these pricing strategies to help quickly pivot with rising food/labor costs rather than having to “eat” your margins. I’d love to see brands in California adopt this strategy as a way off alleviating the blow that the labor cost increase brings which goes into effect in April.
Andy Allin
9mo
I'm following all your and Ashwin Kamlani dynamic pricing posts with interest, and it seems to me that how the message is given (if it's given at all) is key in the reception by the end customer. Of course, the financial bottom line is one of the key drivers for the restaurant's choice of pricing strategy, but there's no way the customer should feel they are being taken advantage of. Surely rather than "surge pricing", the message which the restaurants should be advised to put across to the public is one along the lines of discounts at quiet periods?
Henry Arciolla
9mo
You have 10 to 15 words to put in your headline.. Make them count. Much of the media is sensationalist to draw clicks but not all but as we have seen over the last several years that the media can simply sway public opinion on any topic with a simple headline. This is not a good thing. It is like America is subscribed to the National Enquirer or Weekly World News. The lines of truth are often blurred and sometimes intentionally manipulated to promote predetermined agendas. We see this in Politics, We see this in sports and Entertainment and we see this in business. The ability to discern right from wrong, fact from fiction is becoming a lost skill. We are dangerously close to people just repeating what they are fed. And once they do that they are easily controlled. Brawndo has what Plants Crave
Ben Crowther
9mo
Happy hour pricing is another example of how dynamic pricing is already being used by restaurants. Come earlier and get a discount. Come later and pay full price.
David Murphy
9mo
The harm has been done, this is now a talking point and campaign item for more government involvement in our business. I hope it melts into the background as time goes on.
SVP - Food, Hospitality & Retail | Innovating ops with AI, automation & offshore labor for Restaurants, Retail, Tech, Multi-Units | Bestselling Author | Co-Founder | Board Member |Tech Thought Leader
9moJoseph Szala, GSD, DCMJ Ben Crowther Ashwin Kamlani Ben Coley Danny Klein