AI Bubble or Breakthrough? Navigating the Hype, Challenges, and Realities of AI Adoption

This post was originally written by Marc Emmer for Inc. Magazine

Last February, in a debacle that will be taught in business schools for years, Wendy’s announced that it would be moving toward dynamic pricing. The backlash was swift and fierce, igniting intense debates across social media and rattling investor confidence.

It was curious that critics overlooked comparisons to hotels, airlines and concert promoters who have been using this tactic for years. A restaurant selling fresh fish in Boston or Seattle can set its prices daily, but for a public fast-food operator, the idea of changing prices based on demand struck a nerve.

While Wendy’s appeared tone-deaf in how it positioned dynamic pricing, we are moving toward a world where it will be more readily accepted by consumers. As a reality in a supply-shock world, many restaurants and retailers are moving toward electronic menu tags. Airlines are implementing dynamically priced loyalty points. Amazon dynamically prices…well, everything. And Facebook and Google ad prices are entirely set by the market.

As a practical matter, when a rideshare company uses surge prices, it creates an incentive for drivers to come to the platform, and a disincentive for riders to leave. This rebalances supply and demand so that the system can return to equilibrium. Today, markets experience swings in raw materials, weather, and labor. If, say, a food product is overpriced, it could be thrown away instead of consumed. Whether consumers like it or not, dynamic pricing is here to stay.

The Strategy Experts

Marc Emmer is President and Chief Strategist & Facilitator at Optimize Inc.

He is an author, speaker and consultant recognized as a thought leader throughout North America as an expert in strategic planning.

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