Cyanbane

Absolutely one of the best prognostications I have read in awhile.   I think that for the most part he has hit the nail on the head, but I think that it will be in a much shorter time span (5-8 year outlook) however I think it will be somewhat of a cyclical retail sales method, cycling about every 8-10 years until a good model is found.

 

First, Stross’ thoughts on a somewhat ubiquitous retail pricing strategy are spot on, I think that within the 3-5 year horizon we will start to see this introduced on a per product basis by the retailer through a third party that develops the pricing structure based on personalized data who then guarantees a return to the seller based on communications campaigns similar to the localized deal sites we have today (think Groupon or Living Social).   An example would be if any of these social couponing sites were able to stratify their customer base and tailor deals across a small subset of products to those casts of people.  They will do this algorithmically to find the most proficient manner in which to communicate those deals.  Customer Set A (making $X+ who has a tendency to purchase massage products) may get a deal offering of a 90 min massage for $90 on Monday. On Wednesday, Customer Set B who makes $X/2 and has never purchased something of that nature) may get a 30 min massage offering for $25 and the number of recipients in group Set B maybe tailored to how well group A responded, etc.

 

I think one of the leading indicators of this model starting to take off will be the acquisition of data points about users from social sites and large online retailers.   LivingSocial’s investment by Amazon was Amazon just bringing this in house.   

 

Will this reach the grocery supermarket aisle like the article states?

 

I think yes, but in a different way.  It will start with the non weekly slicing up sale prices by supermakets to a more hourly approach (similar to gas stations).   One indicator of this will upswing in tech used to make signage etc. I think we are a long way off from pointing your smart phone at every veggie you are thinking about buying.  Grocery shopping would become an even more loathsome process for some.  It will hit the perishable markets first, starting with the more higher priced organic stores.   My best guess is that meat/dairy would be first to start to use daily to hourly pricing based on reported market trends then move into fruits/veggies.  

 

The daily/hourly pricing model will then start to be segmented based on day of the week/time of day.  That will be the first swipe at grouping people based on income.   Those coming in at 10am might be met with more friendly algo market prices than those just getting off work at 6-7pm.   Slight variances in quicker perishable goods will be a good indicator.   Lobster picked up at 10am will be cheaper than that picked up at 6.  

 

I think eventually people will get annoyed with this though.  They don’t want to have to have grocers “dictate” the time in which they should be shopping and the market will bare a new competitor that returns to “old ways”.   Other big grocers at the time will start to follow suit until the cycle repeats itself.