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a pint costs how much?
When it comes to personal finances, data shows that Gen Z are worried about their future and trying to save wherever they can. It doesn’t help, then, that companies are increasingly using dynamic pricing to muddy what’s affordable and what isn’t.
Anyone who’s purchased concert tickets over the past few years will know the frustration that dynamic pricing has introduced into the modern consumer experience.
For big acts like Taylor Swift and Oasis, it is now apparently no longer possible to know how much a ticket will cost before you reach the checkout. A single purchase could range anywhere from £70 to upwards of £4000, depending on Ticketmaster’s online traffic and a gig’s popularity. The system is unpopular for obvious reasons and is setting a frustrating precedent that makes it impossible to know whether an item or experience is financially viable.
It’s not just concerts, either. The travel and hospitality industry is often cited as the first to utilise a fluctuating pricing model depending on demand. It created a system where hotel rooms and holiday packages were affordable during the off-season but eye-wateringly costly when consumer interest peaked in the summer or winter. This, naturally, was slowly adopted by other industries, including online retail sites like Amazon, train operators, sports events, and much more.
For Gen Z, this yo-yoing price model has become a normal part of the shopping experience. It is inconvenient and anti-consumer (despite what some marketers and finance experts might tell you), making it harder to plan and budget for a full year.
As we’ve explored before, Gen Z’s attitude toward money is already criticised by older people who believe that they impulsively buy and can’t sufficiently plan long-term, despite numerous studies suggesting the opposite. Can we blame them, though, when so many industries are deliberately skewing the monetary value of their services and altering prices from person to person?
This piece by Business Insider takes a deeper look at the fluctuations that dynamic pricing creates on everyday items and illustrates how the gamification of simple purchasing has crept onto most digital platforms. This means that most of us are now day traders of goods we should be buying at a fixed rate, such as clothes, groceries, and game consoles. Changing how we purchase items in this way is fuelling ‘price discrimination’ and demanding more of our attention to get the best deal at any given time.
We no longer buy items based on traditional sales that are a clear markdown from their original retail value; instead, costs may change every ten minutes, vary from one buyer to another, rise as users flood to buy and drop when they don’t. Businesses now have far more information on our behaviours in real time, giving them an unprecedented ability to mould their asking prices to maximise profits. As most of our buying is now done through first-party apps or websites, we’re at the mercy of any given retailer to provide us with fair prices, which they often don’t.
Is it good for margins? Sure. Does it make everything more of a headache for buyers? Absolutely.
Gen Z are being hit particularly hard by this system. The industries where dynamic pricing is most keenly used are travel, concerts, and fashion, all of which Gen Z care about most compared to their older peers. They also have significantly less disposable income, with fewer options for what they buy and where, due to sheer affordability. Data shows that young people have reduced their spending over the past few years, likely a result of economic uncertainty, the cost of living, and a growing anxiety over their financial futures.
This new way of buying is largely despised by all shoppers, especially Gen Z.
It feels exploitative, lacks transparency, and makes it far harder to understand how much of your yearly salary can be put aside for experiences and trips. When so much of your outgoings are gobbled up by rent, bills, and groceries, it is an additional headache trying to salvage what little you have left for a Billie Eilish ticket that might be £60 or £400, depending on the day and who’s purchasing. The entire system gives companies and retailers almost all of the power, which is never a good thing.
We can’t offer too much advice to push back, aside from keeping an eye on off-peak travel tickets and looking out for seasonal price reductions. The system is so complicated and nuanced that costs can shift in mere moments and might be cheaper for one person compared to another for seemingly no reason. It’s this ambiguity and muddying that is so annoying, and it looks as though things are set to permanently stay this way.
We all have to be extra savvy these days, an unfortunate caveat of modern retailers.
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