The new formula for sustainability of Dynamic pricing saves the world

By Teddy Kuijs

 

What it is

The originally Israeli company Wasteless wants to limit food waste in supermarkets by implementing a ‘dynamic pricing’ system.

 

“Dynamic pricing is something used daily when booking a flight, a hotel, or an Uber, and there is no reason why our groceries should be different,” said Ben Biron, founder, and COO of Wasteless.

 

Based on 42 factors including expiration date, weather, supply, demand, location and time, the consumer is offered an appropriate price via a digital screen. What makes the system attractive/ The attractiveness of the system is/are the lower prices and the little effort it takes for consumers to make choices that lead to less food waste. The system ensures that customers will buy the Ceasar salad with the expiration date of April 19 rather than the Ceasar salad with the expiration date of May 5. In the example shown in the image, customers save 50 percent of the purchase price when they take the Ceasar salad with an expiration date that will putrefy sooner.

 

Why it is Cool

Dynamic Pricing is part of the ‘Internet of Groceries’ a development that promises to recapture one billion dollars of wasted food products every week.

“This is amazing for all stakeholders because it means lower prices for the consumer, more revenue for the supermarket, and of course, it saves our planet by significantly reducing food waste at the retail level, which accounts for 40 percent of the world’s total food waste.” (Ben Biron, founder, and COO of Wasteless).

As Ben Biron said, today 40 percent of total food production is thrown away. In 2030 that should be reduced by half. That is why it is right to ask; how much food is thrown away with dynamic prices?

A pilot in the Spanish supermarket Dia revealed that the supermarket discarded 70% fewer products after the introduction of the dynamic pricing system and the margin increased by 3 percent.

 

Why it has Future Growth Potential

With the system, a huge amount of Big Data will be collected. But what is the purpose of working with Big Data in retail at all? The ultimate goal of using big data is to optimize the profit. According to director Ralph de Vries, it would therefore not be surprising if A-brands will manage their own prices, soon. The supermarkets will then mainly take care of the decoration of the shelves. But that does not mean that implementing the reduction of food waste will stop. In fact, the reach of supermarkets is great among consumers and stakeholders in the food industry. Dynamic pricing can, therefore, bring a change in the cooperation of food chains with the most important aim to prevent food waste. This can lead to a circular system that can be used in Smart Cities that are currently on the rise.