Dynamic Pricing Models and Overall Higher Costs Are the New Normal

Dynamic Pricing Models and Overall Higher Costs Are the New Normal

Michael Raines/Getty Images; Jenny Chang-Rodriguez/BI

We’ve reached the middle of the week! Got a spare $22 million lying around? Check this out Newly listed ranch in MontanaWhere a Soviet Union pilot once lived who defected to the West.

In today’s big story, we look at: Why is pricing so weird these days?.

What’s on the agenda:

But first there is the cost How more?!

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The big story

The era of wild price swings

If the cost of living in America is currently weighing you down, you’re not alone.

Over the last few years, we’ve become (perhaps reluctantly) accustomed to dynamic pricing. Whether it’s the cost of Ubers, airline tickets, or concerts by popular artists, prices that fluctuate based on market conditions have become the new norm.

But after a few years of delving into big-ticket items, everyday items are starting to come with wildly different prices, writes Business Insider’s Emily Stewart. It drives Americans crazy.

To remember Wendy’s “dynamic pricing” fiasco? The fast food chain botched the launch of its new variable pricing model, forcing it to insist it wouldn’t be used to charge more during peak hours. More recently, Walmart introduced digital price tags, which some people said could be used for variable pricing. (Walmart said its “everyday low price” strategy hasn’t changed.)

And when prices don’t fluctuate, they just higher: Of all things fast food with new homes its price has skyrocketed since the pandemic.

The result can be maddening, especially when we can clearly remember a time when prices were more reasonable. Constantly changing costs are creating a sense of price fatigue in consumers, Emily writes.

Michael Raines

Sometimes the only way out is through.

How do you begin to fix — or even just acknowledge — this kind of astronomical pricing? Emily writes that most economists agree that government-mandated price fixing is not the way to go about it. And while inflation has improved, the potential for it to worsen again remains uncertain.

Then there’s the issue of AI-powered price gouging.

BI recently reported that companies are using AI to understand how much you earn, where you are located and what kind of mood you are in. calculate exactly how much you would be willing to pay for something.

And you can’t fight algorithms that know you better than you know yourself.

So, as Emily writes, you can’t blame anyone for feeling a certain amount of gloom and doom about the economy. In fact, some people, The middle-class American dream is completely out of reach.

In times like these, he says, the only way to get used to such high prices is to try to forget the numbers from 2019.

3 things in the markets

iStock; Rebecca Zisser/BI
  1. Forget AI and look at these three under-bought areas. Investors are still reeling from the AI ​​craze, but There is unrealized upside potential in the semiconductor, rail, parcel and home improvement sectorsAccording to JPMorgan, they can deliver returns like “coiled springs.”
  2. Electric vehicle stocks are booming. Electric vehicle stocks are on the rise as second-quarter deliveries crushed Wall Street estimates. Tesla, Rivian and Lucid Group all saw big recoveries, a promising sign for the industry.
  3. How to avoid recession? Artificial intelligence, immigration and rich people Will save the US economy It is recovering from the decline, according to State Street investment strategist Michael Arone.

3 things in technology

  1. Not all autonomous vehicles are created equal. Tesla employees have been told to prioritize data from autonomous vehicles belonging to Elon Musk and other VIPs. Current and former employees say the result has been undue attention to routes frequented by high-profile drivers — and unbalanced use of Tesla’s resources.
  2. “Fightertown, USA” is getting a revamp in artificial intelligence. San Diego was once home to a Navy pilot program that inspired the movie “Top Gun.” Four decades later, defense technology startups are bringing back the aviation boom, but with a difference: The new planes have no pilots. These are powered by artificial intelligence.
  3. TikTok’s music AI chatbot could rival Spotify. Its new AI assistant, Tonik, can create a custom playlist for every mood, help users discover new music, and more. BI tested this last month and was very impressed — but there is still some work to be done.

3 things in business life

Tyler Le/BI
  1. Odd houses are very popular. Crazy, colorful, maximalist homes are having a moment thanks to the viral Instagram account “Zillow Gone Wild.” The disgust with stereotypical homes and the weariness of the beige era are increasing demand for more flavorful homes.
  2. The world’s richest people are flocking to Idaho. Billionaires flock to Sun Valley for the annual summit of the wealthy, and their private jets fill the ski town’s small airport. The official guest list for the “summer camp for billionaires” is not public, but We have some ideas about who will attend.
  3. Sorry, you’ll have to wait a little longer for the flying car. Pivotal, a flying car startup backed by Google co-founder Larry Page, delayed its first shipments to customers another nine months. It now expects to deliver the airborne cars in spring 2025.

In other news

What’s going on today?

  • President Biden met with new British Prime Minister Keir Starmer. Labour defeats ruling Rishi Sunak’s Conservatives In last week’s elections.
  • Fed Chair Jerome Powell delivers the Midyear Monetary Policy Report to Congress.
  • Samsung is hosting the Galaxy Unpacked event, which features new product launches.

Insider Today team: Editor Jordan Parker Erb in New York. Editor in chief Lisa Ryan in New York. Senior editor Hallam Bullock in London. Associate producer Annie Smith in London. Researcher Amanda Yen in New York.