Kotipizza has tried out dynamic pricing with home deliveries in a cooperation with Priceff since May 2019. Perceived fairness of dynamic pricing improved customer satisfaction. Kotipizza customers who were familiar with dynamic pricing considered it fairer than customers who didn't recognize the method. Customer loyalty improved perceived fairness of dynamic pricing. People who found the delivery price they paid expensive, perceived dynamic pricing unfair.
Kotipizza was the first Finnish restaurant chain to try dynamic pricing with home deliveries in spring 2019. Demand determined the price of home deliveries every five minutes. The price varied between €0,10 and €5,90. The results of the pilot project were extremely positive. The number of deliveries grew by 54 % and revenue by 19 %. Kotipizza and Priceff has continued cooperation in home deliveries pricing after the succeeded trial.
During the trial, our Project Manager & Analyst Lari Metsälä gathered data for his master's thesis. The aim of the project was to increase understanding of perceived fairness in the context of dynamic pricing. The survey received a total of 439 responses.
"The pilot project was a unique opportunity to research perceived fairness of dynamic pricing in a real live business case. The results revealed that perceived fairness is a crucial factor in what regards the successful dynamic pricing project. Is it also important that the customers understand the basics of price determination. At its best, dynamic pricing can be a win-win-situation. Price-conscious customers can save costs and the company can increase its revenue" says Lari Metsälä, Project Manager & Analyst at Priceff.
The master's thesis is available at the link below (in Finnish).
