Wendy's to Experiment With "Surge Pricing"

[bjl584]

Menu prices to fluctuate based on time of day and current foot traffic and demand.

Wendy's to use AI for surge pricing (yahoo.com)

[disneysteve]

We saw that this morning. What a stupid idea. The price of a hamburger shouldn’t be different at noon than it is at 3pm. At the same time, though, the concept is already in use in other places. It costs less to see a movie on Tuesday afternoon than on Saturday night. A matinee on Broadway is cheaper than an evening performance. A ticket to Disney World costs more Christmas week than it does in February. I’m not aware of any places doing surge pricing for food though.

[scfr]

I wonder why they are choosing to market it as surge pricing instead of off-peak discount, which might amount to the same thing but be an easier sell. Plenty of places do that in the form of Happy Hour and Early Bird Specials.

[kork13]

I think if they run it the opposite way, giving discounts when they have low traffic, it could work to their benefit -- if 9-11am & 2-5pm are low-traffic periods, they could offer a 20-30% discount (with push notifications via app), which might induce people to make a trip who might otherwise not go. Or if they were planning to go out for lunch anyway, maybe they'd consider going early/late to avoid the rush. And it would be of benefit to the locations because the lunch rush volume might get spread out more, leading to less stress, shorter waits, and fewer mistakes.

But of course, they'd have to keep the base price steady, otherwise you're just playing the game of jacking the price only to offer discounts. Jacking up the price during peak periods (keeping off-peak prices steady) would almost assuredly just drive customers elsewhere.

[disneysteve]

Happy hour and early birds are a type of surge pricing I suppose. They’re designed to bring people in at times that are traditionally slower. What Wendy’s is doing is more dynamic it seems with prices moving up and down throughout the day based on traffic. I don’t think they specified but I assume it will be location based. The one that is right across from a popular tourist attraction would then have different prices than the one on the outskirts of town.

[ua_guy]

Seems to be a trend with companies charging more and not caring about the loss of sales volume. If they can raise the price of a good, and still make more money even though they're selling less of it, then, win.

Come to think of it, I had a surprising Wendy's experience recently. Walked into a newly remodeled one in Sandpoint, ID. Very modern, seating around a faux fireplace that generates heat, trendy lighting, and lots of other non-traditional seating. Ordering was handled through kiosk. I believe you can still order at the counter, but the store is configured to channel foot traffic to the machines.

[disneysteve]

Seems to be a trend with companies charging more and not caring about the loss of sales volume. If they can raise the price of a good, and still make more money even though they're selling less of it, then, win.

Come to think of it, I had a surprising Wendy's experience recently. Walked into a newly remodeled one in Sandpoint, ID. Very modern, seating around a faux fireplace that generates heat, trendy lighting, and lots of other non-traditional seating. Ordering was handled through kiosk. I believe you can still order at the counter, but the store is configured to channel foot traffic to the machines.

Fast food places have been moving toward greater automation. It keeps costs down and also helps them keep operating despite a labor shortage. Some places no longer have counter service at all. Chipotle has been opening pickup only locations where you must order in the app. Dunkin Donuts opened a location near us last year that’s the same way. Digital orders only.

[disneysteve]

Wendy’s has now said they are not experimenting with surge pricing which would charge more at busy times. They are doing dynamic pricing which would charge less at slow times.

[ua_guy]

Well I guess that's an inexpensive way of doing market research. Tell the internet you plan to do something and watch it blow up, then retract or revise the statement.

[disneysteve]

Well I guess that's an inexpensive way of doing market research. Tell the internet you plan to do something and watch it blow up, then retract or revise the statement.

I think they’re saying the media misinterpreted their announcement and assumed they’d be raising prices at busy times which was never the plan.

[kork13]

I think they’re saying the media misinterpreted their announcement and assumed they’d be raising prices at busy times which was never the plan.

More accurately, Wendys' media relations people screwed up. Words mean things, and they used the wrong ones to describe their plans. As all of us stated, the way they apparently are actually gonna do things makes alot of sense to help bring in traffic during slow periods, and offload traffic from busy periods. How did we get the idea but their media relations people didn't? Well.... The word "incompetence" immediately comes to mind, but.......

[ua_guy]

You're on to something, Kork... Corporate comm teams have many jobs, but they really have ONE Job.... get the message right, the first time. And that seems to be a point of failure with non-ignorable frequency.

[srblanco7]

More accurately, Wendys' media relations people screwed up. Words mean things, and they used the wrong ones to describe their plans. As all of us stated, the way they apparently are actually gonna do things makes alot of sense to help bring in traffic during slow periods, and offload traffic from busy periods. How did we get the idea but their media relations people didn't? Well.... The word "incompetence" immediately comes to mind, but.......

I noted the same yesterday. Branding "fail" on the part of Wendy's.

[LivingAlmostLarge]

That's crazy.