On this episode of Spark: Coupons, Dynamic Deals, and Bubbles. Click below to listen to the whole show, or download the MP3 (runs 54:00).
Podcast: Play in new window | Download (Duration: 40:06 — 18.5MB)
You can also listen to individual stories below.
The Next Tech Bubble
Back in the mid-90s the tech world was, well, on top of the world! Dot-coms were hot and making quick millionaires out of the little guy. But when the stock market plummeted, those companies did too. The tech bubble burst. Fast forward to today where we seem to be in another tech bubble with companies like Facebook and Group valued in the billions (and billions) before they’ve even gone public. Is it in danger of bursting too? Nora speaks with Mathew Ingram, the Senior Writer for the GigaOM technology blog network and someone who is familiar with the gold rush effect that funds brash young start-ups. (Runs 12:16)
Play audio:
- Mathew Ingram
- Mathew’s posts on GigaOM
- Investopedia: What Does Tech bubble Mean?
- Full uncut version of interview with Mathew Ingram
Dynamic, Personalized Pricing
Awhile back, an article in Slate pulled the curtain back on online dynamic pricing. Maybe you’ve heard about it, but it was news -and still is news- to a lot of people that some online retailers use people’s browser histories and the cookies stored on their computers to change the prices of the goods and services you are buying. In other words, your web surfing history can influence your buying future. They’re making cash off your cache. Nora speaks with Andrew Gregson, the author of Pricing Strategies for Small Businesses about the origins of dynamic pricing, and the dangers of its online incarnation. (Runs 9:15)
Play audio:
- Andrew Gregson
- Pricing Strategies for Small Businesses
- Slate: How Much Is That Doggie in the Browser Window
- Full uncut version of interview with Andrew Gregson
Group Buying
Everywhere we go online these days, there’s a flashing box promising “Hot Dealz!” as long as we act fast and get all our friends to act fast too. Consumers love group-buying companies like Groupon or Living Social. It’s so hot that Google is launching its own version, Google Offers. And then there are group messaging tools like GroupMe and Beluga that let you share texts with groups of people. It’s a kind of “real time Groupon” – targeted ads and local deals that pop up on your phone. Facebook is also getting in on the game with instant localized discounts that pop up when you “check in” at a particular location. Nora speaks with Paul Cubbon, a marketing professor at the University of British Columbia about the rapidly changing world of online group buying and the rise of a coupon economy. (Runs 16:03)
Play audio:
- Paul Cubbon
- Paul’s blog
- Group Buying primer
- Globe&Mail: What to expect when taking the group-buying plunge
- Spark blog: Do You Have Coupon Fatigue?
Coupon Hacking
Clicking on a group buying deal is simple, and for those of us who buy into these sales, we think we’re getting a good deal. But there are networks of people out there online, turning little pieces of paper into massive savings. Yes, paper coupons still exist, and in this online world, those paper coupons are being shared along with secrets about how to use coupons to hack retail. Spark contributor Sterling Eyford gives us a glimpse into this underground world of diaper deals and airfare abundance. (Runs 8:38)
Play audio:
Sterling’s Helpful Coupon Hacking Tips:
- Look for coupons you will actually use. If you are trying to save money, there’s no point getting coupons for items that you wouldn’t regularly use. However, be open to breaking your brand loyalty, and experimenting with
similar products. - Use coupons on sale items. You will save a lot of money if you combine a coupon with an item already on sale. Which leads me to this point – when you collect coupons in a store, NEVER use that coupon in that store. In store
coupons tend to only appear on regularly priced items. Take those coupons, and find the best deal. - Keep organized – coupons will save you money, but if you don’t know where your coupons are, or when they expire, you are throwing money away.
- Watch the forums – hundreds of thousands of Canadians are crowd sourcing deals every day. Take advantage!
Episode Details
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Typo in this line…
"dynamic pricing, and the dangers of it’s online incarnation. (Runs 9:15)"
Otherwise, great job, Spark!
Fixed. Thanks!
Good show as always… My thoughts on dynamic pricing:
I think that customers are fine with dynamic pricing, however, I believe that regular, repeat customers expect that the dynamic pricing will benefit them, not penalized them. I understand the allure of a business thinking: "Customer x shops here every week, buys the same things, they are a sure thing – lets charge them more." We see that already, with contract imposing organizations such as cell phone companies who offer incentives to sign up, then bump the price once you are locked in. I believe that a business, especially a small business, depend on the relationships they can build their customers. If your regular customers find out you are using dynamic pricing to essentially punish their loyalty, that is a huge problem. These people are your regulars, and they are often your brand ambassadors. The allure of dynamic pricing is easy to see, lower prices for new customers makes sense to expand your customer base – but be care that the optics don't leave your existing customers feeling undervalued, and exploited.
Listening to Sterling Eyford – so smug and self-satisfied with how terribly clever he is – was infuriating. I hope his six-month-old daughter was happy sitting surrounded by plastic bottles because if we all behave the way her father does, that's how she's going to spend most of her life: surrounded by piles of plastic that no one wants and nobody knows how to get rid of. The idea that Mr. Eyford would buy plastic bottles of vitamins that he has absolutely no use for with no thought whatsoever to the impact of his behaviour as long as it saves him money on something he needs – scratch that, something he wants – is beyond offensive. He is an excellent standard-bearer for our self-indulgent, short-sighted consumer society.
Those piles of plastic would sit on the store shelf regardless…who cares really..they make a fun noise for the baby when she rattles them! Good on him for racking up that many miles on those purchases…Besides look around yourself I am sure your surrounded by many short sighted consumer purchases!
Having managed retail, and really anyone who thinks about it will realize this; when people buy things, they get replaced with new ones. So, if the vitamins sat on the shelf until someone bought them who actually needed them, they wouldn't get replaced until then. Ultimately $500 worth of vitamins are sitting, currently aging and unused, and have already been replaced with newly manufactured ones somewhere down the channel. Those vitamins either come from natural components from the environment (plants, animals, yeast, etc.) or mineral sources (mined or otherwise gathered) or made synthetically from other resources, not to mention the environmental footprint created to make and package and store and ship them. Your statement reminds me a bit of when people are asked where beef comes from, and they say, "the grocery store". We all need to think beyond the obvious when we make decisions in how we run our lifestyles, and how others are impacted by those decisions.
As an entertainment agency based in Vancouver, we made a decision a number of years ago to stop using dynamic pricing. Typically in the entertainment industry, you size up a client/event and structure your pricing around that. So in our case if we were providing a magician for an event at a downtown hotel for a high-end law firm the price would be substantially higher than if it was for a private party at a pub in the suburbs. The reason we stopped was simple. People talk. When Mr. Jones talked to Mrs. Smith and they realized that they paid a different price for the same magician, it hurt our reputation.
I think online companies will have to to be very careful if they decide to pursue dynamic pricing. With Twitter one click away, it would be very easy to "out" these companies.
magicians at high end Lawyer events?!?… that is so hilarious! do they get clowns and animal balloons too?, how about pin the tail on the DA?
I'm sure I'm not the first or last to say this but please adjust the audio to stay the same through out the breaks between the stories. This is ridiculous. Where ever I listen to this podcast if it's not me it's someone else adjusting the volume. Up and down, up and down, come on now. Fix this please.
Love the show but this is really annoying.
I'm with Barb Doyle on the Sterling Eyford piece. It reminds me of the old joke:
spouse 1, after spouse 2 arrives home from shopping: "we can't afford that"
spouse 2, "but I saved $20"
spouse 1, "oh, in that case, we should buy 10 more so we can save enough to pay the rent this month".
If you think about the resources that went in to producing all those vitamins and that each bottle has a limited shelf-life, and then you think about how much of the world population lacks basic nutrition, you might consider more carefully the trade-off you make for your airfare.
We are so embarrassing.
You forgot to link to frugalshopper.ca
The main focus is to share the deals, spead the news about what's on sale and save money by shopping sales and using coupons to keep our own hard earned money in our pockets. The focus is more on keeping money in our pockets and sharing good news not necessarily bragging about a score or stockpile.
If Sterling bought those vitamins and sent them off to a charity specializing in providing vitamins to the less fortunate, that would be commendable, but he didn't mention what he did with the mountain of vitamins, so assumptions are being made, and he's doing to be judged harshly for hoarding.
Dynamic Pricing – The fundamentals !!! Most computer & internet users are non-technical and therefore naive. You cannot (without risk) operate a PC like your car. In a car, you turn the key, a funny sound occurs, you grab the lever and move it "D", and magically the car moves forward. On the other hand, your PC requires constant attention which is usually in the domain of the technical folks. For example, how could you possibly operate a PC without the benefit of programs like computer cleaner (ccleaner.exe), it will clear out the cookies and temp files and other stuff on request, and should be used during and after all internet browser sessions. Also, use the firefox browser and run it in private mode. How many know that Microsoft includes spyware in the Windows operating system? Always use 2 malware checkers, what one does not find, the other one might. How many use Spybot as a 2nd checker ? Most naive PC users cant tell the difference between updating their malware file vs scanning their harddrive. And on, and on, and on, and on, and on. This whole area needs attention for millions of naive PC users.
Wow ! So True !!
Hello, Sam. You may be interested in a story we did about a year ago, called "Computers are Hard. Who’s to blame?" You can find it here: http://www.cbc.ca/spark/2010/03/spark-107-march-2…
I like to save money on my purchases, as many people do, but as Sterling Eyford admitted, he using the coupons in a manner they were not designed to be used. The end result will be manufacturers will stop the practice because what Sterling and his friends are doing is abusive. Yeah, the retailers may or may not care, because they get paid regardless by the coupon distributor, but if he thinks he getting back at "the man" he's wrong. He's actually getting back at others who may be even in a less capable financial position, who can't spend the time on the internet (or can't afford an internet connection) who will now find their purchase is more costly to cover Sterling's "killing". The basic principle is "someone has to pay", and if it isn't him, then it is someone else. Sure, take advantage of the cents off coupons, one per family, as they are intended, but when people hoard, waste, and take much more than their fair share, it costs others to balance it out. Sterling, do the right thing, and give those vitamins to a charity which can distribute them before they expire.
Oh, and BTW, Barb and others are also right about using cloth diapers, about the plastic bottles, and about the carbon footprint flying involves. No one lives in isolation these days, and if the internet can do anything, it should be broadening our awareness about the consequences others may pay for our short sighted actions.
Bah humbug!
I was touched by Opera Bob's concern for the "rising cost of food…in Canada" and diminishing wages. What a hypocrite. His practices as well as those of coupon hacker extraordinaire, Sterling Eyford, certainly aren't being "used in the spirit of which they're intended". What may not be illegal, doesn't make those practices morally just. I'd like to think that these freeloading consumer buying behaviours are very much the exception, but given what's been happening to the Canadian retail industry over the past decade, that's likely not the case.
Avid listener to this show and keep up the great work. First time I am making comments on a show and just wanted to take the opportunity to say the shows are world class.
I just heard the podcast today, and I had to say something.
Dynamic Pricing, particularly using client browsing history or other personal data collected to adjust prices, sounds like me shooting myself in the foot.
Here is where I would love to have ownership of my private information, often stolen, or legitimately collected with little of my knowledge, to make me pay more.
I would love to have a mechanism of charging for this information myself as a source of income, instead of having others collect it and sell it for their own profit. Afterall, I am the one generating this information, which can help companies forecast their inventory, and determine what to charge me.
Side note, I agree that what a company collects from my behavior, if I choose to log in while browsing their website is their own data and they may use that information internally.
What I liked about the internet was that it was a a level field for competition. With the lack of tools for consumers and corporations developing ever more sophisticated tools of squeezing money out of markets, I feel the balance is shifting, not in the consumer's favor.
Hi Marc, thanks for the kind words. I think there have been conversations, theoretical ones, about the possibility of this type of 'data ownership' model, including looking at whether intellectual property rules might be used as a model of govern our ownership of our own data. Might actually make for a good segment on a future Spark!