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B&Q to test variable price tags

B&Q is testing a high-tech pricing system which alter the cost of products according to shoppers’ profiles

Loyal shoppers could benefit from new electronic price tags currently being tested on the high street, which vary an item's cost according to the customer’s profile.

B&Q is piloting the high-tech system in the hope of rewarding regular customers with discounts and special offers.

Under the scheme, wifi-connected price tags will identify passing shoppers from mobile phone chips then access data from loyalty cards or past spending to reach a suitable price which will be displayed next to the item.

The variable pricing is being billed by B&Q as an improvement on the deal vouchers handed out at checkouts.

But it has sparked concern about the introduction of a two-tier pricing system which will benefit the rich.

The DIY firm has introduced the new tags in its Castorama stores in France and is now planning to install them in the UK.

Speaking to the Daily Mail, Ian Cheshire, chief executive of B&Q’s parent company Kingfisher, said: “We have done various behind-the-scenes tests.

“It’s all about special offers for individuals where we are looking at bundling offers or giving discounts.”

Mr Cheshire, who is also chairman of the British Retail Consortium, revealed he was also considering variable pricing models like those used by airlines, so the cost of products would vary throughout the week based on levels of demand.

Under the system being tested, some items are cheaper during the quiet shopping periods early in the day and at the start of the week to encourage more people to visit out of peak hours.
Spreading customers more evenly throughout the week would ease queuing times, car park congestion and staffing fluctuations.

Mr Cheshire said: “We could move to dynamic pricing and mimic the model used by easyJet.

“Yield management techniques are not new – it’s just they haven’t traditionally been used in retailing.

“Pricing could be adjusted based on time of day.

“I am on the board of Premier Inn owner Whitbread and when I joined they had two different prices for their hotel rooms – now it’s 10,000.

“Look at how the airlines work and what you can do online, people are used to that.”

Source : Miranda Prynne - The Telegraph

22 October 2013
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