{"id":23716,"date":"2024-05-15T07:53:41","date_gmt":"2024-05-15T11:53:41","guid":{"rendered":"https:\/\/www.wasserstrom.com\/blog\/?p=23716"},"modified":"2024-05-15T07:53:43","modified_gmt":"2024-05-15T11:53:43","slug":"will-dynamic-pricing-hit-the-menus","status":"publish","type":"post","link":"https:\/\/www.wasserstrom.com\/blog\/2024\/05\/15\/will-dynamic-pricing-hit-the-menus\/","title":{"rendered":"Will Dynamic Pricing Hit the Menus?"},"content":{"rendered":"\n

The restaurant industry is abuzz with a concept borrowed from other sectors: dynamic pricing. This strategy involves adjusting menu prices based on factors like time of day, customer demand, and even weather. While not entirely new, technology and consumer interest are creating a potential tipping point for its widespread adoption.<\/p>\n\n\n\n

Dynamic Pricing in the News<\/h2>\n\n\n\n
\"Wendy's
Wendy’s turns to tech to offer customers better deals amid inflation. Unlike surge pricing, which drives prices up during busy times, dynamic pricing drives prices down during slower times, providing value to customers and restaurants.<\/figcaption><\/figure>\n\n\n\n

Innovative fast-food chain Wendy\u2019s recently made headlines for announcing plans to experiment with dynamic pricing. While it was initially misinterpreted by the media as \u201csurge pricing,\u201d<\/a> president and CEO Kirk Tanner clarified<\/a>, “Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and day-part offerings.”<\/p>\n\n\n\n

This move echoes the sentiment presented in the NRA\u2019s 2024 State of the Restaurant Industry Report<\/a>. They found that more than 8 in 10 adults would take advantage of discounts for dining on slower days of the week or off-peak times of the day. The NRA also found that 90% of restaurant operators say their customers are more value-conscious<\/strong> than they used to be.<\/p>\n\n\n\n

Digital Dining and Data<\/h2>\n\n\n\n
\"Three
Recent studies show that 8 in 10 adults would take advantage of discounts for dining on slower days of the week or off-peak times.<\/figcaption><\/figure>\n\n\n\n

Dynamic pricing isn’t entirely revolutionary in the restaurant world. We’ve seen it in action for decades with happy hour specials and early bird promotions<\/a> aimed to fill seats during traditionally slow periods. However, these methods often have fixed windows and limited menus. Modern dynamic pricing aspires to be more nuanced, adjusting prices in real-time based on live data.<\/p>\n\n\n\n

Data on a Plate <\/h3>\n\n\n\n

Online ordering platforms and reservation systems create a wealth of customer data. Restaurants can now track not only peak hours but also analyze dishes in high demand during specific times and leverage this information to adjust pricing strategically<\/a>. For example, imagine a breakfast joint slightly increasing prices for pancakes on a particularly busy Saturday morning, while offering a discount on omelets to incentivize a quicker-to-prepare option.<\/p>\n\n\n\n

The Price Is Right<\/h3>\n\n\n\n

Currently, early adopters might use basic analytics to adjust prices based on factors like day of the week or time of day. However, future-facing operators are interested in the role AI could play<\/a> in taking dynamic restaurant pricing to a more sophisticated level. Machine learning algorithms could analyze vast amounts of real-time data, including:<\/p>\n\n\n\n