Wendy 's will begin experimenting with rising prices and wants to adopt dynamic pricing, a tactic that Uber and Lyft have implemented.
As part of its digital push, Wendy's plans to implement digital menus at all of its restaurants in the United States by 2025, the company in February. During the trial, items such as burgers, ice cream and other menu items will feature "dynamic pricing," which will adjust based on demand.
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“Starting in 2025, we will begin testing more advanced features, such as dynamic pricing,” Wendy’s CEO Kirk Tanner said at the company’s annual earnings conference on Feb. 15. “We plan to invest approximately $20 million to install digital menu boards in all stores by the end of 2025.”
One of the advantages of these digital menus is the ability to adjust prices. Consumers have become accustomed to price increases through ride-sharing services like Uber and Lyft, where prices fluctuate dramatically based on demand. Dynamic pricing is a relatively new concept in the fast-food world. Prices adjust based on supply, demand, competitor pricing, and other external factors that can be calculated using an algorithm.
A Wendy's Baconator costs $12.24 in New York City, but with dynamic pricing, that price can vary throughout the day. The price of the burger can increase during lunch or decrease during the afternoon. Wendy's did not provide details on how much the price can fluctuate.
Tanner predicts that dynamic pricing will lead to immediate sales growth, but this approach is risky. The majority of consumers (52%) believe that dynamic pricing means higher prices, while 65% say it makes it harder to decide where to eat, according to research from Capterra.
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This isn't the first time Wendy's has tried to integrate technology into your everyday life. The company had plans to introduce an AI-powered to work in the drive-thru in May. However, it later turned out that the secret technology behind those experiences was actually just human. The company also announced a self-driving robot that will be installed in tunnels, aiming to help you pick up your order by 2023.
Source: gizmodo.com
