Dynamic ticket pricing: make sure you don’t look back in anger

If you were one of the thousands of fans eagerly trying to score tickets to Oasis' highly anticipated reunion tour this past weekend, you might have noticed something a bit odd about the prices.

One minute, tickets were going for a reasonable £50, and the next, they had skyrocketed to £200 or more. But why? The culprit is something called dynamic pricing.

What is dynamic pricing?

Dynamic pricing is a strategy where businesses adjust the price of a product or service based on real-time demand. It's a way for companies to maximise their profits by charging more when demand is high and less when demand is low. In the case of the Oasis tickets, Ticketmaster used dynamic pricing to adjust the ticket prices based on how many people were trying to buy them at any given moment.

Who uses dynamic pricing?

Dynamic pricing is most commonly used in industries where demand can fluctuate quickly, such as:

Travel

Airlines and hotels have been using dynamic pricing for years to adjust prices based on factors like the time of year, day of the week, and how far in advance you book.

Entertainment

As we've seen with Oasis tickets, dynamic pricing is becoming increasingly common in the entertainment industry, particularly for high-demand events like concerts and sporting events.

Retail

Some retailers use dynamic pricing to adjust prices based on factors like the weather, time of day, and even the customer's location.

The allure of dynamic pricing deals

Dynamic pricing offers shoppers attractive deals and discounts, making products or services seem more affordable. These offers can be tempting, especially when they appear to be time-sensitive or exclusive. But be cautious as they may not always be as cheap as they first seem.

The psychological impact of dynamic pricing

Dynamic pricing can also have a psychological impact on shoppers, leading them to make impulsive purchases they may later regret. The fear of missing out (FOMO) on a good deal can be a powerful motivator, causing people to buy things they:

• don't necessarily need
• can’t afford

The constant fluctuation of prices can create a sense of urgency and scarcity, triggering consumers to act quickly without fully considering the financial implications – as we saw this weekend with Oasis tickets.

This psychological pressure can be particularly dangerous for those who are already struggling with debt or have a tendency to overspend. The temptation to take advantage of dynamic pricing deals can lead to a cycle of debt that becomes increasingly difficult to break free from.

How to avoid falling into the dynamic pricing debt trap

To prevent dynamic pricing from leading you into debt, you should:

• Stick to a budget – before making any purchases, make sure you have a clear understanding of your financial situation and how much you can afford to spend.
• Research and compare prices – don't assume that a dynamically priced offer is the best deal available. Take the time to research and compare prices from multiple sources.
• Consider the long-term costs – when evaluating a dynamic pricing deal, think about the total cost of ownership, including any additional expenses or hidden fees.
• Avoid impulse purchases – give yourself time to reflect on whether you really need or want the item before making a purchase, especially if it's a significant expense.

While dynamic pricing can offer shoppers attractive deals and discounts, it's essential to be aware of the potential risks.

 By understanding the psychological impact of these offers and planning ahead, you can avoid falling into the debt trap that dynamic pricing can sometimes create.