‘Oasis surge pricing debacle will stoke wider retail digital price gouging fears’

Digital shelf-edge labelling and dynamic pricing may not be the same thing, but the row over Oasis tickets threatens to confuse the two to retail’s detriment.

Colossal demand for the kings of Britpop’s reunion gigs led to long online queues, at the end of which many fans faced stratospherically high ticket prices far in excess of original face value as a result of the dynamic pricing applied.

The controversy erupted last weekend and by the start of the week the government was promising an investigation into surge pricing, while regulator the Competition and Markets Authority said there would be an “urgent” review.

“Retailers are already in the sights of politicians in the US over digital shelf-edge labelling – and what happens Stateside crosses the pond”

It can all seem a long way from the workaday world of store shelves, and more identified with airlines or Uber rides, but it may well be too close for comfort.

In fact, retailers are already in the sights of politicians in the US over digital shelf-edge labelling – and what happens Stateside crosses the pond.

While frequently talked about, digital shelf-edge labelling and the advantages it can bring – including the ability to rapidly change prices – has been relatively slow to take off in the UK.

That may be changing. Lidl, for instance, announced in February that it would move from paper price tags to electronic shelf labels in its British stores by the end of this year. The switch is expected to save about 206 tonnes of carbon per year, while creating efficiencies by freeing staff time previously spent checking and updating paper price labels.

Those are the benefits retailers typically seek through the adoption of digital shelf labelling.

Walmart, which is installing the technology in 2,300 branches by 2026, made similar points when unveiling its plan, which it described as a “game changer” that would help reduce operational waste and allow staff to “spend more time assisting customers and less time on repetitive tasks”.

Yes, electronic shelf-edge labels could be used to price according to demand. However, in many retail categories – essentials such as food being the most obvious example – that is unlikely to be the main driver of their use.

Can you really imagine surge pricing on the last few BLT sarnies towards the end of lunchtime? It’s more likely they would be marked down than up, whether electronically or with a traditional yellow sticker.

But some people – and now probably more, in the wake of Oasis and other surge pricing controversies – will wonder whether retailers’ ability to change prices instantaneously may not be to their benefit.

“UK retailers have brilliant price authority and integrity that they would never jeopardise, and shoppers would vote with their cash if they felt they were paying more than necessary”

Reaction to behaviour by consumer businesses perceived as surge pricing can be hostile. US burger chain Wendy’s, for instance, was earlier this year forced to issue a denial that it would use dynamic pricing on digital menus to increase prices at busy times.

Also in the States, grocer Kroger’s adoption of digital shelf-edge labelling has drawn the scrutiny of politicians.

Just a couple of weeks ago, senators Elizabeth Warren and Bob Casey said they were investigating Kroger – America’s biggest supermarket group – over its use.

They wrote to the retailer: “These digital price tags may enable Kroger and other grocery chains to transition to ‘dynamic pricing,’ in which the price of basic household goods could surge based on the time of day, the weather, or other transitory events – allowing stores to calibrate price increases to extract maximum profits at a time when the amount of Americans’ income spent on food is at a 30-year high.”

Kroger said that “any test of electronic shelf tags is to lower prices more for customers where it matters most. To suggest otherwise is not true.”

UK retailers would no doubt agree. They have brilliant price authority and integrity that they would never jeopardise, and shoppers would vote with their cash if they felt they were paying more than necessary.

However, the developments in the US show how quick some are to make connections between technology that can work in favour of retailers and consumers and the sort of pricing tactics decried as a scandal over the past few days.

That may prompt some retailers to avoid digital shelf labelling, while those that proceed will need to be alert to the threat of consumer misunderstanding. How long will it be before a Warren wannabe over here starts sniffing around the issue?