McDonald’s has been using artificial intelligence to dynamically price menu items in the US and some global markets, according to a report by Reuters. This involves finding the “optimal price” to match what a particular store’s patrons would be willing to pay.
This fluctuates according to location, and even stores in the same city can have different cost amounts for the same exact items, according to information reviewed by Reuters. This is basically surge pricing, like with ride-share platforms, but for hockey puck burgers that have been sitting under a hot lamp.
Reuters got a look at the interface that franchisees use to access this technology and it’s pretty creepy. Messages show stuff like “your restaurant is showing MEDIUM SENSITIVITY to price” based on “customer willingness to pay in your area.” Cost differences at nearby locations can be stark. Researchers found that a Bic Mac at a Fresno, California store cost $5.69, but the same burger cost $6.89 at another branch two miles down the road. That’s a 21 percent difference.
Can someone smarter than me explain what end game dynamic pricing looks like? I feel like supply/demand will move the price of essentials up as wealthy people buy items at higher prices. It eill be easier for a company to make 200 roles of toilet paper a year and sell them for $10k as an extreme example.
End game? No one thinks further than 2 financial quarters into the future anymore.
The end game looks a lot like it currently does. Charge the maximum they can get away with. Set a stupidly high floor, raise it per-person.
Unfortunately, if the cruelty of the (engineered) computer memory crisis is anything to go by, it might be exactly like your example with toilet paper. McDonald’s could decide that it’s more profitable for them to do some kind of catering model and price the average individual consumer out of relevance
End game is probably a monthly subscription model where you can buy the privilege of getting fixed prices for a month. People that lack a McMealPlan or whatever will pay according to their social credit score, inventory levels within a given location, or simply the whims of the franchisee.
McDonald’s Prime.
sadly this is the most believable.