This article was taken from the October 2014 issue of WIRED magazine. Be the first to read WIRED's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.
Past behaviour predicts future behaviour. That's the motto of data analytics, which uses algorithms to predict what we can be persuaded to buy next -- and how much we're willing to pay. There are, however, ways to out-predict the predictors. Here are a few of Poundstone's tricks that can help you get the best online prices.
Try the "abandoned shopping trolley" When making a major purchase online, put whatever you want in your virtual shopping cart and click "checkout". Fill out the form with your name, address and email. Move on to the payment info but don't enter you card number. Wait a few days. Why?
You may get an email offering free shipping, a discount or other freebies. Data analytics show that such follow-up emails are almost always read and that the discounts do motivate people to complete the purchase. Companies hate to lose a sale that might lead to a new, steady customer.
Compare with a clean browser Say you buy chocolates for your mother's birthday.
A year later, you skip the research. You figure that the company that had the best value last year will be the best value this year.
But some online retailers offer lower prices to new customers than to repeat buyers. One remedy is to block cookies and website data in your browser's preferences. But most of us like having our web experience customised. A more realistic solution is to maintain an alternate, "clean" and cookie-disabled browser that you use just for comparisons.
Track the prices over time Large retailers set prices by algorithm, and the code takes into account rivals' prices, also set by code. This feedback loop makes prices more volatile than ever. A web price may suddenly rise or drop 20 per cent for no apparent reason. It's like the flash crashes that roil the financial markets. Even the retailers don't understand it. Typical consumers Google the "best" price and think themselves clever. They fail to consider the time element. Those who pay the "best" price at the wrong time can spend hundreds more than what someone else did a few days before or after.
Follow the fluctuations Use a website or app such as CamelCamelCamel to track prices. The Amazon price for a sauté pan has been known to vary from $429 to $160 (£250 to £94) over a two-year period. Most people would be shocked by this. The smart buyer can play day-trader with such data and wait for a favourable time to buy. A good rule of thumb is never to pay more than the average of the lowest web price over the past year. If a product (with no issues of technological obsolescence) is selling at a 20 per cent-plus discount from the long-term average, be ready to pounce. That price probably won't last.
This article was originally published by WIRED UK
