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 frugal retail psyche


Japan firms fight the frugal retail psyche with AI-driven pricing and other tricks

The Japan Times

After years of soggy inflation and a long reign by Japan's tight-fisted shoppers, businesses are adopting new methods to lift prices, from artificial intelligence to simple packaging tweaks. Despite many rounds of stimulus, policymakers have failed to jolt households out of the deflationary mindset that followed the 1990s property crash, which meant businesses refused to raise prices for fear of losing customers. Demand-based dynamic pricing, however, has allowed some Japanese retailers to discretely bump up prices without triggering the kind of customer backlash seen in more blatant attempts at repricing in the past. The J. League soccer team Yokohama Marinos, for example, introduced artificial intelligence last year to more closely align ticket prices with demand. "Previously, it was difficult to find the best prices between demand and value of each match," said Hiroshi Nagai, the club's general manager for fan relations. "The most fascinating thing about dynamic pricing is that it can offer more choices to customers."