This Tequila Bar Uses an Uber-Like Pricing Model
We’re accustomed to prices for everything from airplane tickets to car rides (hello, Uber!) being moving targets — subject to something called “surge” or “dynamic” pricing, in which the amount you pay for goods or services fluctuates depending on real-time supply and demand. If a lot of people want flights or rides when you do, you’ll pay more; on an off day, when demand is low, you’ll pay less.
But barring happy-hour specials, most of us are used to the price of a drink at our neighborhood watering hole being pretty stable — not something that changes from one minute to the next, depending on what and how much you and the guy at the other and of the bar are tippling.
That is not the case if you’re drinking tequila at The Blind Burro. The San Diego Mexican restaurant and bar, which lists more than 100 tequilas on its menu, uses a dynamic pricing software system called The Drink Exchange to track patrons’ orders in real time and set menu-item prices accordingly, the Associated Press reports. The fluctuating prices of the bar’s selection of tequilas are displayed on TV screens around the bar: Depending on demand, a drink that costs $8 one minute may be $7.50 the next — or it may shoot up to $12.
“Just purchase a drink featured on the TV Display and watch the prices change!” The Drink Exchange website touts.
The software, which the company’s website describes itself as “a Stock Market pricing system designed to increase profit, attract patrons, and create an exciting and dynamic environment,” is now being used in about 20 food and drink establishments.
“In the old days, dynamic pricing was thought of as a pricing technique used in fixed capacity industries such as airlines,” pricing strategist Rafi Mohammed told the AP. “But the new thinking is dynamic pricing can be used in any industry where demand or supply fluctuates.”
The gimmick sounds like fun, but drinker beware: It’s easy to get swept up in the excitement and drink more than you might have otherwise — and The Drink Exchange is designed to take advantage of this likely occurrence. “Patrons will capitalize on ‘good deals’ and purchase more items than usual,” the software system’s website promises potential clients.
Plus, The Drink Exchange encourages its clients to list high-profit-margin items in the system, as well as products for which they are receiving “kickbacks” from liquor distributors.
“Most Drink Exchange clients are being compensated by their liquor distributor to assure that specific items are listed in the system,” the company’s site notes. That’s something to be aware of as you choose your booze, but the relationship with vendors may actually work in bar patrons’ favor.
A while back, The Drink Exchange makers told Wired they wanted to use the system to help companies test market new products — in which case price parameters may be set very low in order to gauge interest and response.
Photo courtesy of iStock