Wednesday, January 14, 2015

How Amazon Tricks You Into Thinking It Always Has the Lowest Prices | Re/code

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"The study was part of a white paper Boomerang released on Tuesday to bring attention to the idea of price perception in e-commerce. The startup has created a “price perception index,” which it described as “a numerical pricing model that captures customer psychology of price perception. It does so by providing a tangible statistic of how a company’s products … are priced, relative to the competition, weighted by customer interest.”

The goal of the index is to highlight how a nuanced approach to pricing — such as Amazon’s — can be a smarter, more cost-effective option over simply price-matching across the board. This is where Boomerang enters the conversation: The startup wants to help Amazon competitors think about pricing in as sophisticated a way as Amazon does."
How Amazon Tricks You Into Thinking It Always Has the Lowest Prices | Re/code
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