Friday, November 1, 2013

Businesses Track Customers

The New York Times reports that some retailers are tracking customers smart phones in their stores via WiFi in a effort to provide better store layout and also to offer more customized pricing (through personalized coupons).

This is one of the implications of the profit-maximizing firm model.  As firms get better at understanding customer behavior (economists call this demand) and specifically their customers preferences, then the firm can use that information to create more value to the customer and also set prices that capture some of the value created.

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