Supermarkets shoot down claims grocery “surge pricing” is in the works, but could digital tickets be a win for retailers?
Monday, July 3, 2017/
Australia’s supermarket giants have shot down reports they are considering Uber-style “surge pricing” at supermarkets, but experts say digital ticketing could still bring big benefits to retailers.
A report from news.com.au last week explored the concept of digital ticketing in Australia, replacing the current method of physical paper tickets. Recent reports have suggested UK supermarkets could use these digital tickets to rapidly change prices at busy times, similar to the surge pricing concept used by hotels and ride-sharing app Uber.
A follow-up piece this morning claimed an anonymous former Woolworths store manager told the publication they had seen plans for trials of electronic tickets in stores.
However, both retail experts and the supermarkets themselves have rebutted these claims, with associate professor at Queensland University of Technology Gary Mortimer telling SmartCompany it would be a “PR disaster” to introduce surge-style pricing.
“They would never do it. The first retailer to implement surge pricing for groceries would have a PR disaster. Imagine consumers trying to buy milk, but it’s been hiked up to $2.20 because it’s a bit busy?” he says.
“It works in hotels, it works for flights, but it won’t work in groceries. It would be a disaster, and shoppers won’t stand for it. They won’t do it.”
Australia’s supermarkets have resoundingly agreed, with a spokesperson for Coles saying the business had “no plans” to introduce either digital ticketing or surge-pricing models.
A spokesperson for Woolworths told SmartCompany the company “does not have any plans to introduce electronic pricing”.
“We are focused on providing our customers with everyday great value on the products they love no matter what time they shop,” the spokesperson said.
An Aldi spokesperson also shot down the idea of digital price tags.
“At this stage, we have no plans to trial or implement digital price tags in any of our Australian stores,” they said this morning.
Don’t discount idea of electronic price tags just yet
While the concept of grocery surge prices is heavily denied at this stage, Mortimer believes Australia’s supermarket trio could still look to introduce digital ticketing in the coming years, saying it has been a reality in Europe for “over a decade”.
“It’s a great concept, so I’m surprised it’s taken so long to come Down Under. Australia tends to follow global trends when it comes to retail, and disappointingly we don’t do much innovating ourselves,” Mortimer says.
“Even then, we like to follow the US and the UK, not Europe.”
The main benefit for retailers when it comes to electronic tickets will be reduced labour costs, believes Mortimer, with the current ticket replacing process requiring hours of work and “teams of people”.
“The digital tickets would have this all done automatically, with all the old specials taken off and the new ones put on. It would be a cost-saving measure,” he says.
Though Mortimer is dismissive of the surge pricing concept, a switch to the other direction to provide short-term price drops for customers is something he could see happening.
“They may do it to reduce the price on slow selling lines, or if they have a large volume of perishables they need off the shelves,” he says.
“In these situations supermarkets could reduce the price for one-hour specials, and digital ticketing could facilitate this automatically.”
And while digital tickets could be a few years off due to the relatively high costs of installation, Mortimer believes they won’t be just for the larger retail players.
“Even small businesses can use these systems. I once was in a little kiosk in France selling phone covers with digital ticketing, so there’s definitely applications outside of supermarkets,” he says.