However, a 2023 Capterra survey revealed that over half of the 900 U.S. restaurant goers surveyed equated dynamic pricing to price gouging, and 65% said it made deciding where to eat more difficult. Despite this, consumers are often reluctant to avoid services with dynamic pricing, according to Raghuram Iyengar, a professor of marketing at Wharton. He suggests that the success of Wendy's new pricing strategy will depend on managing customer expectations and justifying price surges in a way that customers find acceptable.
Key takeaways:
- Wendy’s is planning to experiment with dynamic pricing, where prices of items will increase during busier times, similar to Uber and Lyft's price surge features.
- The company will invest $20 million in digital menu boards to facilitate this pricing strategy and offer promotions and discounts at certain times.
- Despite consumers generally disliking dynamic pricing, with over half of restaurant goers surveyed calling it price gouging, they are reluctant to stop using services that implement it.
- Wendy’s success with dynamic pricing will depend on their transparency and ability to justify price surges in a way that customers find acceptable.