Long a pillar of the travel and ride-share industries, dynamic, demand-based pricing is now a reality for most consumers. Ticketmaster’s dynamic pricing took center stage in the past year with tickets for major artists like Taylor Swift and Bruce Springsteen marked up to exorbitant price tags. But it’s not just live events: retail, auto, utility providers, and more have made this pricing model all the more commonplace.

CivicScience recently gauged consumer sentiment toward dynamic pricing that increases and decreases in response to the level of demand – and a strong majority (62%) agree with the claim that it’s akin to ‘price-gouging.’ (Thirty-seven percent of U.S. adults ‘strongly agree’ with the claim.)

In some cases, like ride-share apps, “surge” pricing is presented as such and consumers know what they’re getting into, but sometimes it isn’t so clearly stated. When consumers are aware of dynamic pricing, a majority (56%) claim they won’t purchase the product at all, while nearly a third (31%) will look to buy it elsewhere. A slim minority (13%) will just purchase the product as planned. 

Gen Z shoppers are slightly more likely than any other age group to buy the product as planned (17%). Generally, shoppers under 35 are the most likely to look elsewhere for the product, while those 35 and older are the most likely to give up on buying it altogether.

In many instances, the companies employing dynamic pricing don’t give consumers much of a choice. Ticketmaster is the only merchant for most of the biggest concerts; Tesla is the only company selling Tesla cars. But there are ways to get creative on the resale market, and companies should be vigilant about how their consumers might navigate these shifts.

CivicScience took a closer look at how different shopping preferences intersect with consumer response to dynamic pricing. Online shoppers are the most likely to purchase the product from a different brand or retailer, while in-store shoppers are nearly twice as likely as online shoppers to purchase it as planned. Meanwhile, those who value brand over price are overwhelmingly the most likely shoppers to purchase the product from a different brand or retailer when faced with dynamic pricing.

More unexpected dynamic pricing brand insights:

  • CivicScience polled customers of several brands to gauge their behaviors when met with demand-based pricing.
  • Of the brands polled, Walmart customers are the most likely to claim they’ll ‘purchase the product from a different brand or retailer’ (37%) – just a hair above the likelihood of other brands. Target is close behind at 36% who will purchase elsewhere.
  • Lyft customers are the most likely to purchase the product ‘as planned’ with dynamic pricing, perhaps reflecting the limited options for getting a ride – and how surges are baked into the ride-share experience.
  • Tesla customers are the most likely of the brands polled to not purchase the product at all when faced with dynamic pricing – and the least likely to say they’ll purchase it as planned.

Interested to know how your brand’s customers might respond to dynamic pricing? Book a meeting today for deeper insights, and unlock a free month of premium content.