Amazon has been at the center of online shopping for more than ten years. We've learned to trust their judgment and low prices because of time and testing
But what if Amazon was manipulating you into buying their products for more than you had to?
Retail analytics company Boomerang Commerce released a white paper on Wednesday titled "Achieving Competitive Pricing without Racing to the Bottom". The report, written by Boomerang Commerce founder and Amazon veteran Guru Hariharan, uses Boomerang's software to take a look at the tactics Amazon uses to get people to spend more time and money on their site.
According to Re/Code, which was was the first to report on the white paper, Amazon's tactics work as follows: they first identify the most popular products, then price them under the competition. However, Amazon would increase the price on less popular items, especially ones where the customer wouldn't take the time to compare prices (such as modems, cables or other necessary accessories).
This information was all gathered so that Boomerang Commerce can create a "price perception index", a mathematical model that measures how customer interest affect a company's products when compared between sellers. Hariharan told Re/Code that their goal with this data is to help retailers compete with Amazon.
While vendor competition is certainly an important goal, this data is even more useful for customers. Understanding how Amazon manipulates the various sales and products throughout the year will help you remember to check multiple vendors to see who has the best deals, as well as how you might be manipulated by vendors.
