Photo by Christian Weideger on Unsplash
October 17, 2024
Will Amazon Benefit by Showing Pricing History?
With the help of its new AI shopping chatbot, Rufus, Amazon is experimenting with allowing some users to access the pricing history of the products sold on its platform.
According to a report from Wired, a limited number of U.S. consumers are able to access an item’s pricing history through a chat with Rufus, which was launched in early February. Navigating to a product page, tapping Rufus, and prompting it with “price history” shows an item’s lowest price on Amazon.com over the prior 30 days, according to Wired.
On Amazon’s app, Rufus can reveal a line chart detailing the item’s pricing trends over the past month.
For consumers, the benefit of seeing an item’s price history is having more confidence that an item on sale is actually a good deal.
A Washington Post article from last fall noted that a fairly common retail tactic is raising the price of an item for a short time, then marking it down to the original price while promoting it as a limited-time, steep discount. Jie Zhang, a professor of marketing at the University of Maryland, told the publication, “This is a form of deceptive pricing.”
The Post noted such practices are illegal but hard to prove because it’s difficult to accurately track retail prices of a specific product over time.
For Amazon, a benefit of letting consumers see recent price moves may be improving pricing credibility. The platform has a reputation for constantly changing prices via sophisticated algorithms.
As an example, the Wired article noted that during Amazon’s recent Prime Big Deal Days event, a LifeStraw personal water filter was on sale for $10, half off its listed original price of $20. The pricing history revealed the price had dropped as low as $14 over the last 30 days, likely leading a customer to see themselves getting a solid 30% discount from the Prime Big Deal Days offer, albeit not 50% off.
Google Shopping offers a price history tool that lets online shoppers know “if a product’s price is low, typical, or high, and how its price changed in recent months” across the retailers linked to its platform. For instance, the product page for a Hamilton Beach Toaster Oven shows the item’s price has ranged as low as $35 and as high as $58 based on stores across the web over the past three months, with the best current deal being available at Walmart for $39.99.
For Amazon shoppers, rogue sites employing a browser extension, such as camelcamelcamel and Keepa, detail the price history of products on the platform for months and sometimes years. Camelcamelcamel, the best-known price tracker, has been around since 2008, showing there’s some consumer interest in such price transparency.
Discussion Questions
Do you see more benefits than drawbacks to Amazon in revealing the recent price history of its products?
Would such a level of pricing transparency be highly appealing and useful to most Amazon shoppers?
Poll
Loading …BrainTrust
Frank Margolis
Executive Director, Growth Marketing & Business Development, Toshiba Global Commerce Solutions
Anil Patel
Founder & CEO, HotWax Commerce
Brian Numainville
Principal, The Feedback Group
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This is great for consumers because it allows them to understand what a good price looks like and whether discounts and deals are genuine and worthwhile. It will also counter accusations of fake pricing, which are sometimes levied at Amazon. Amazon actually already does this in a less explicit way than described in the article as it often alerts when average prices are lower on regularly purchased items – so it has all the data needed to enable this. All that said, I am not sure all sellers will be quite so positive about this new feature.
How curiously this issue is phrased: there doesn’t seem to be any interest at all in how consumer‘s might benefit…only Amazon. To some extent this makes sense – this is, after all, Retailwire, not Consumerwire, so gauging the big A’s ability to pry more semoleon’s from our wallets makes sense – but most of us here are consumers as well.
Rant over: as a rule I favor greater transparency…whether it helps the seller or not.
The price history exposure on Amazon could increase trust and credibility and reduce the number of sneaky third-party rip-offs, but the system will only be as effective as its accuracy and completeness.
My preference would be to look at data for six to eight weeks rather than just thirty days. Prices on promotion should also be noted in the details. Consumers need to know and understand, for instance, if the “lowest” price was during Prime Days or Cyber Monday.
I think that this price transparency will build consumer trust. Even if the customer does not engage with Rufus, knowing they have the ability to see the price history adds credibility to the offer.
It will be a benefit for consumers and ultimitley Amazon. It will build consumer trust and confidence. Additionally it makes sense to start displaying it before other technologies get there first and Amazon is on the defense. The risk lies in that most consumers do not understand how Amazon Market place works and Amazon partners who do not react to this new transparency may give Amazon a black eye. Amazon may need to update its Market Place policies.
I think this is a good move for Amazon and could be beneficial to shoppers. I’d like to see a longer window of time, though, on the price data since there could be seasonal or other fluctuations, like Amazon promotional events, that could move the price up and down.
Retailers that have fair and consistent pricing will always have more loyal shoppers vs those who constantly move price in order to drive short term profits. Transparency in pricing is a smart move by Amazon and will build consumer credibility and trust over the long term. A great example of this is in the airline industry. Six months ago, I purchased a ticket to Europe for x price and the price of the ticket 4 months later went down by y amount. The airline immediately credited my account with the difference in price. Do you think I’ll fly this airline again? Absolutely. It’s a great way to drive loyalty and brand ambassadorship.
Sounds like work to get to the price history. Chat with Rufus? Is this to measure whether consumers care about price transparency? Rest assured that they do, but running an obstacle course is not transparent.
Great for consumers – if it’s honest and transparent. As Amazon has been accused of not just dynamic but also differential pricing in the past, accuracy of the information is key.
I do question how this may impact their bottom line – if they’re already running at such low margins, would this erode their margins more?
Amazon revealing recent price history is more of a benefit to consumers than to Amazon. While it boosts transparency and gives shoppers more trust, it also exposes how often Amazon manipulates prices. For shoppers, this is highly appealing because they can make smarter decisions and avoid falling for fake discounts. But for Amazon, it risks losing the ability to create urgency around sales. If customers see that prices fluctuate constantly, they might hold off on buying, knowing the price will drop again soon. It’s a bold move, but I don’t think Amazon fully wins here.
To borrow from The Coasters (Somebody Shake Me, Wake Me (When It’s Over)), I hope that Amazon didn’t invest much in this R&D because I can see very little value to the consumer. As the article points out, retailers can play “deceptive pricing” games with this feature to the disadvantage of the consumer. Why are they doing this?
I see two benefits to this strategy. First, it makes a customer feel confident the price they are paying is in line with the recent history of the product’s price. Second, this is a form of transparency. Both add up to one of the most important words in retail: Trust. If a customer doesn’t trust you, they may not come back. However, give them a reason to trust you and they may be so impressed they won’t take a chance on another store. Some are even to pay much more for the price from someone they trust.
In an odd twist, the research I have seen says this is a bad idea.
While it’s easiest to compare prices online, research says few online shoppers compare prices. They go with their trusted supplier. Amazon has earned that trusted supplier spot with many shoppers. A bit surprising but offline shoppers compare prices more diligently than online. Humans are fun!
Let me be contrarian. Sure, while Amazon’s decision to provide a product’s price history signals a desire to better service customers via additional transparency, could it be possible that there are other objectives in this move? Why not just buy CamelCamel (it is only a 4 person shop) which is likely a cheaper, and more comprehensive solution that better addresses this problem statement? Just for discussion’s sake, let’s assume that there is a bigger goal to assume larger control over consumer perception and to more greatly influence consumer buying behavior. Under this model, Amazon owns the “good deal” narrative (with what I believe this to be more a snapshot than a useful indication of a product’s full lifecycle on the platform. Think about how Google Flights has a broader insights window to capture nuances like holiday traffic surge, off-season discounting etc..) and squeezes out other insight tools that might be more comprehensive (i.e. longer price history and beyond the Amazon ecosystem). Perhaps we should take pause before we spike the football.
Retailers and brands already track price fluctuations to monitor rivals’ moves. Offering pricing history insights to customers makes sense, as shoppers have been more price conscious since 2022.
By allowing customers to track pricing history provides transparency that deepens trust.
This will foster more trust in Amazon’s brand and I suspect many trust is EXTREMELY difficult to gain. This level of transparency achieves that.
I would be very interested to know if the Finance function was “on board” with this change. IF they were, even better. If not, then I suspect this initiative may be short lived.