Thursday, May 12, 2016

California Bar Uses Dynamic Pricing For Tequila Shots

Down a shot of tequila at The Blind Burro and the second round may cost you more. Or less. It all depends on what everyone else is drinking, reports CBS San Francisco.

Tequila prices at the San Diego bar and restaurant can change every five minutes based on demand. If more people order one tequila brand, the price of another might drop. Software, created by Los Angeles-based The Drink Exchange, tracks what drinkers buy and flashes the changing prices of more than two dozen tequila brands on TV screens hung on the bar’s walls. On a recent night, a shot of Espolon Blanco tequila was $7.75 one minute and fell 50 cents to $7.25 a few minutes later. At the same time, another brand rose a dollar to $12 a shot.

CBS continues:
The quick change in prices is known as dynamic pricing. It’s a strategy airlines have used for years, charging more for flights on summer weekends or ahead of Thanksgiving and other busy holidays. Cab hailing app Uber does it, too, raising fares when more people need a ride. Now other industries are doing it, including zoos, sports teams and producers of live shows, and even more will likely join them thanks to software that can crunch data and tell businesses when prices should go up or down. The software companies say they have seen rising demand for their services. The Drink Exchange, for example, is in more than 20 restaurants or bars.
“In the old days, dynamic pricing was thought of as a pricing technique used in fixed capacity industries such as airlines,” says Rafi Mohammed, a pricing strategist. “But the new thinking is dynamic pricing can be used in any industry where demand or supply fluctuates.”...
The Indianapolis Zoo switched to dynamic pricing before opening its popular orangutan exhibit two years ago. Tickets used to cost about $17. Now they change daily online and can cost anywhere from $8 to $30. The zoo uses software from Indianapolis-based Digonex, which looks at several factors to determine ticket price. As more people buy tickets online for a certain day, the price ticks up. If poor weather is in the forecast, the price may not rise any further. Saturdays and Sundays tend to be the most expensive.
As a result, more visitors are coming to the zoo on weekdays instead of weekends, says Indianapolis Zoo CEO Michael Crowther. The zoo tells visitors to buy tickets online for the best deal...
Icon Concerts, a live show promoter, says sales of a comedian’s shows are up 10 percent since the company began testing dynamic pricing a year ago. Tickets cost $1 or $2 more on Saturday nights than Friday, says Icon Concerts President Paul Meloche. That might not sound like much, but at a 10,000-seat arena, that means as much as $20,000 for the comedian’s pockets or to help pay for production costs.
Some big theme parks have switched to demand-based pricing this year.


  1. Maybe they should try this with toilet paper in Venezuela.

  2. I've used the fast passes at theme parks, willing to pay a far higher price to get all the rides in on one day. And I was grateful for the opportunity to do so. If we were going to be at a park for several days, there would not have been a need.

  3. For concerts and zoos, where there's a good chance of having to turn people away if the price is too low, or have empty seats if the price is too high, dynamic pricing makes perfect sense. For a bar and the price of a particular brand of tequila? I don't quite see the point, unless the bar has a limited stock, which would be bad business practice.

    As an aside, $12 for a shot of booze?? I must be a cheapskate, as that seems ridiculously outlandish to my eye.

    1. It's just a gimmick. You are correct. It only makes sense for products that have a very limited supply, stadium tickets, Uber drivers etc.. not for a liquor store that for all practical purposes can order can unlimited amount of a given tequila at a fixed price.