Consumers feel exploited by brands' dynamic pricing

A recent Gartner survey reveals that a majority of consumers feel exploited by brands employing dynamic pricing strategies.

The survey, conducted by Gartner's Consumer Community among 303 US consumers in October 2024, highlights that 68% of consumers express feeling taken advantage of when brands implement dynamic pricing models. Additionally, 80% of respondents believe that brands maintaining consistent pricing are more trustworthy, and 42% are open to spending more if price consistency is assured.

Gartner's 2024 Cultural Attitudes and Behavior Survey, completed by 1,532 individuals in September and October 2024, found that 79% experienced unexpected pricing scenarios over the past year. These scenarios include surge pricing, hidden fees, and unforeseen rate hikes.

Kate Muhl, VP Analyst in the Gartner Marketing practice, remarked, "While inflation may have eased, suspicion and frustration have not - and these negative sentiments are fueling distrust and price paranoia. As a result, consumer loyalty is diminished and the brand relationship hardens into something more adversarial."

She further suggested marketing leaders focus on demonstrating price stability and enhancing customer retention with price-stabilising tools and loyalty perks. "In categories with more price volatility, empower consumers to make the most of a fast-paced market," added Muhl.

Post-inflation trends reveal a shift towards what Gartner describes as "conspicuous underconsumption." Consumers are increasingly viewing thrift as aspirational, with 68% citing self-improvement motives for reducing consumption, and 33% reporting that resisting consumerism offers the advantage of sharing this choice with others.

Muhl stated, "These consumers are embracing frugality to regain control after years of inflation-driven thrift. They are intentionally reducing consumption and curbing wasteful habits, with the added benefit of saving money. Leaders should lean into playful austerity and support consumers' efforts to go bare bones."

Furthermore, the concept of "norming," or seeking an objective understanding of one's position within the community, is becoming increasingly significant. A majority of 82% have engaged in at least one "norming" activity, such as crowdsourcing opinions online or comparing financial progress.

Muhl advised against over-reliance on interactive decision tools as these can isolate consumers. "Consumers value context for its own sake, so marketing leaders should provide them with insights that help them understand themselves within a broader context rather than solely guiding them to a product decision," she commented.

Human-free automation technologies are on the rise, with 74% of consumers open to such innovations, like delivery drones and cashier-less stores. Of those, 30% have already tried and would use at least one of these technologies again.

Muhl noted, "Marketing leaders must ensure the transactional benefits of human-free automated services or experiences, such as speed and convenience, are prioritised. It's also important to lean into more intrinsic drivers such as novelty and fun, to reinforce and enhance the experience."

The survey also highlights that baby boomers are amplifying the generational divide with their confidence and thriving behaviour, contrasting younger demographics.

"While variations in consumer attitudes and behaviors across different life stages are anticipated, the generation gap with baby boomers signifies a deeper and more pressing issue. This is particularly important for leaders whose brands must forge genuine connections across generational cohorts," said Muhl.

She concluded, "Marketing leaders should use optimistic themes and traditional media strategies to engage baby boomers, while deploying smart social media strategies and more culturally sensitive themes to reach younger consumers."