Personalised pricing strategies – the future of essential markets?

Personalised pricing strategies – the future of essential markets?

Citizens Advice has published an investigation into personalised pricing in essential markets based on Frontier Economics’ research into this area.

The growth of big data and analytics is allowing companies to better understand their customers. This, in turn, raises the possibility that companies may use this enhanced understanding to develop personalised pricing strategies to a far greater degree than we have seen before. Citizens Advice were interested in knowing how such developments might impact consumers in essential markets.

Our research found little evidence to suggest that personalised pricing is currently taking place in essential markets – defined by Citizens Advice for this study as water, energy, telecoms and post.  However, given that personalised pricing has the potential to evolve in unknown ways over the coming years, the challenge for policy makers and regulators will be to ensure that the benefits of personalised pricing are maximised, while providing appropriate consumer safeguards. 

Future regulatory challenges in relation to personalised pricing are likely to include the following key themes.

  • Ensuring consumer data is collected and used appropriately
  • Transparency in personalised pricing practices
  • Engaging consumers in the market

Frontier Economics regularly advises private and public sector clients on harnessing and adapting to technological changes.

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