Another commenter posted some JavaScript that runs to find the price floor. Wouldn't a system like this be subject to virtually everyone finding the lowest price almost immediately?
Because I intuitively understand that there is a fixed price floor, it just feels wrong. What's weird is that I don't get this feeling when I'm bargaining with someone in person. Even if we're trying to find an agreeable price, I don't feel like I've lost when we agree, just because he might go a little lower.
My guess is that this has a lot to do with instantly receiving the item in question.
I think it's the fact that you know the price floor is pre-meditated. When you negotiate with someone you feel like you are both compromising, whereas in this case you know they've already decided what their fair price is, and are hoping you don't push hard enough to achieve it. Which may sometimes be the case in real negotiations, but they put a human face on it which makes it more friendly.
If you play with it enough, you'll see that it won't go down to the minimum in all cases. The algorithm will insist on what it analyzes the user will pay, and will prefer to lose the sale on account of saving its credibility for the long run.
Also, this is just the beginning. It will get much wiser as we go.
I think the risk is that:
1. users will know the price is not correct, and even when they 'haggle' it down, they will feel that they are in some way being taken for a ride.
2. users will be left wondering if they could have paid less
3. users that don't haggle, and find out later will become a support cost, as they phone up to demand the price that their friend paid
4. users that don't haggle, but find out later, will simply feel ripped off, and will not return.
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I think eBay handles this quite elegantly, with the 72 hour window for a response. Often I want something ASAP, and even though I know I can haggle, I'll pay the buy it now price rather than wait for a response. Alternatively I'll wait for a real person to get back. Knowing that someone is considering my offer is pleasing, as is their comments back sometimes, explaining why they can't meet the price I suggested, which can turn me into a customer at a slightly higher price if I like what they are selling.
Automating this too much removes the interaction, and the feeling of achievement - if ever purchaser from a market store in Egypt knew what people had paid before, it would feel very different.
1) based on previous spending habits of a user on the site, and/or credit score, social media profile or a simple age, location profile, the shopkeeper (system) knows a rough geodemographics / personality of the user.
2) First price shown is variable depending on this algorithm. Some users who are poor will have cheaper prices. Richer ones, or users who like to spend time haggling will have higher ones. I've no idea if this is the best strategy - but some game theory and psychology of shopping will be used for the algorithm, you can work that out :)
3) User is able to purchase, or haggle.
4) Different users have different floors.
5) RNG - Sometimes a user will get a product for much less than the floor. They will feel as if their haggling got them a real bargain, because they really did! Sometimes the retailer will not sell the product unless they are making a larger margin than before. Retailers who use the system will feel as if they are making a real profit, because they really will be!
An essential part of the real life bargaining experience is that you're stuck with the attempts you make and, short of finding a new vendor, you can't try again with a clean slate.
How do you propose to deal with users who (eg) open multiple incognito windows in Chrome? Or will users need accounts and need to be logged in even to have a go? It seems like users will naturally want to game the system.
I felt the experience was cheapened by the fact that the 'bargain' button made it obvious that the starting price was very inflated. That is not always apparent to customers browsing in a store, and perception counts.
I thoroughly enjoyed my time bargaining when I visited Ecuador. I think I would have loved it even more if I spoke Spanish :).
However I have a few qualms with this.
1. Most shoppers on the internet are using the internet for three reasons; (A) they are looking for the lowest price possible, (B) they are minimizing their shopping time, or (C) they are looking for something they can't find locally at a brick and mortar. If I were an (A) or (B) shopper, this is a huge turn-off to me. It is neither explicitly giving me the lowest price possible nor is it time efficient.
It might work with the (C) shoppers but that that would require some testing. Do you think a Fab.com or Etsy retailers would use this? [Not being snaky, an actual question]
2. The emotion of bargaining does not translate with e-commerce. To me, e-commerce has always been an emotionless experience.
Whenever I was buying something in Ecuador there was a certain rush I got when I locked horns with a merchant. We developed a certain bond when we finally came to an agreement and each party has thought they had won. That rush is missing here (for me anyway). I'd be curious to hear how merchants feel who normally do business this way.
At some point, your demo asked me to think of your children, which seems to fall into a cultural stereotype.
On the internet, no one knows your a dog.
Or cares, really.
The larger point is: you invited me to think of your children, without giving a compelling reason why I should even care.
This is the internet - it's depersonalizing, anonymizing, delocalizing, and dehumanizing. Pretty much the antithesis of everything related to traditional haggling.
So, tell me again: who are these children, what do they look like, how old are they? If they're old enough to work, why aren't they, etc. If they're not cute, by my cultural standards which you have only a small chance of guessing, then what's up with that?
It's much easier to either drive a customer away or raise non-germane questions during a depersonalized haggling event. It's also way to easy to have those questions begin driving the conversation in the customer's mind.
Note: I'm from a culture where haggling over price is not the norm and I'm not a fan of it. YMMV where you are.
A clever idea on paper, but in practice I can't help but think users would wonder whether or not they got the lowest possible price, and consequently would abandon their shopping carts if they felt they hadn't. As a result, you'd see a lot fewer conversions. Obviously that's something that would need extensive testing though.
Considering the % of abandoned shopping carts these days, I doubt if there's any lower place to go :) however of course you have a point. This things needs testing.
I would just input the lowest number until it stops lowering the number, so I get the lowest price.
Suggestion to fix this: either slow the site needs to bargain 10+ times, so people get "bored" with trying to bargain for the lowest price (while still not seeming like a "bargaining gimmick" too much) or say you lower it 3 times in a row, but if I try the 4th time, it raises the price again, and maybe put a snarky message like "I see you're trying to bleed us dry, so let's start over" or whatever. But do these raises in a pretty random way. I figure this would have the effect of having people not want to try to bargain too many times to get the lower price, because they would be forced into "starting over". So they might just agree with the 2nd or 3rd bargain.
This is a great idea but I don't think it could work. My immediate tactic was to put in 10 dollars each time until I saw the price dropping barely any lower. It wouldn't take a non-technical person long to realise this aswell, so in practice, shops would probably just raise prices accordingly, and look uncompetitive if people compared the unnegoriated price.
The difference with in person bartering is that you're dealing with a real person, who can walk away from a deal, and who has actualy emotions and needs. I don't care if I offend this computer with my ridiculous offers and I don't see the market stall owner with children to feed.
2. Is there a cheaper price elsewhere? (Google search to verify)
3. Yes? See ya ...
4. No? I'll think about it.
Step 3 is a huge problem. First off, haggling requires a degree of exclusivity, either a) real: you're the only selling it, or b) imagined: you make someone believe you're the only one selling it.
If 3a is the case, awesome.
If 3b is the case, you can easily be caught lying to the customer, never a good place to be in. There are acceptable lies (called marketing) and unacceptable lies (pretty much everything else).
You don't want to get caught in the everything else.
It's an interesting idea (I can see a couple of use cases for it), but otherwise, I'd avoid haggling prices on the web.
This algorithm is more relevant to shops where the products on sale aren't that widely distributed all over. It's more for the Shopify, BigCommerce etc speciality shops. It will never compete with Amazon (as long as amazon works on fixed prices)
Interesting. A couple of observations, from grappling with some of the same issues for our negotiation site.
Definitely agree that you wouldn't want to share the seller's bottom line in the event of a match. This would lead to built-in buyer's remorse. I gather this may have been for initial proof of concept, not long-term functionality. But you also need to think about the impact of masking the algorithm (see below) so it can't be reverse engineered (on the flip-side) and consider what information can and should be given about the process.
Agree with one of the comments below that slowing down the result may make for better user experience. This was (surprising) feedback we received for impassebreaker.com -- people felt "let down" when the match was revealed too fast. There's a game component here, and a big splash may be important. Then again, it does seem a bit deceptive to show a progress bar when the result is already calculated.
Subjective observation, but based on a decent amount of feedback. Users need to trust that the process is fair. Trust is hard. If you place the bottom line in context -- e.g., show your user what the comparative price is on other sites -- would that context make the bargaining process smoother and build more trust? Might it also make the site stickier? If your provide the comparison shopping data, then people won't need to leave the site to do comparison shopping. That may or may not make you more appealing to sellers, so perhaps it's not on point. As it stands, the process seems arbitrary -- I totally understand that this is an early sketch, but if/as you build it, I'd keep this in mind. I can't remember the cites, but I believe there's some research out there that suggests that people are more inclined to trust computers in a negotiation than other people. So you have a potential advantage if you make the playing field seem a bit more level. At the end of the day, what you may be building is a trust machine. Maybe it's different, but that's how I've thought of our platform.
Negotiation style is culture and language dependent. The verbal dynamic that works in the Suk won't necessarily work in Omaha. One isn't better than the other, of course. But if the goal is closing sales, you need to keep context and language in mind, and at a very granular level. Words and how they are presented are key. Maybe that's part of what the system learns.
Best of luck. There's some potential here, long term, for something very cool. I'll be interested to see where you take this.
https://www.impassebreaker.com. If you click on the "about us" button on the front page you'll find links to some reading (in the answers) that you may find interesting. Feel free to email me off-line with any other questions -- stephen at impassebreaker dot com.
Great idea, dissapointing proof of concept.
There are many things to do to work out a bargaining algorithm.
What is the price of a similar item in other online stores? What does the potential customer finds appealing in the deal? Is it the first time the user tries to bargain for the same or similar item? Are there other items of interest (that the user browsed) we could throw in the bargain to make the user buy at the listed price? Or redirecting the user to a feature enhanced item for the same price.
Offering a lower price as soon as the user starts bargaining might also make him think that listed prices are not real prices.
The idea does not make any sense in my head. There is actually some research happening in negotiating AI, but they all focus around as a training material. It seems pointless to trade with a computer. As pointed out by others, negotiating is not one sided "drop price", but justifying price drops or offering/receiving something in return.
I am deeply sorry for giving this negative feedback.
The site assumes bargaining is anything but a social act. If you are going to bargain with a computer you will always enter 0 as the price you are willing to pay and see where the algorithm takes you.
In real life you wouldn't insult the seller by asking for 0$ but have to employ more social tactics to get a good price.
Just so you know, your homepage's responsiveness doesn't work perfectly at all screen sizes. This is what it looked like for me running Chrome 33 on Ubuntu 13.04 http://i.imgur.com/DzXDUm6.png
Interesting idea, but as others have noted, once it's known the game is rigged, it's just a matter of time before I find the price floor. Perhaps a random price floor for each shopper?
To be honest I really didn't spend much time debugging the add-to-cart button for this demo. I hope ppl understand that and focus on the bargain experience.
> the obvious strategy is just offer $1 until you reach the price floor.
Fair enough, but...
> dumb...pointless...
Really? Did you read the question "how likely are you to remember this shop?" below the experiment? Because I totally would remember this and am much more likely to return at a later time.
Because I intuitively understand that there is a fixed price floor, it just feels wrong. What's weird is that I don't get this feeling when I'm bargaining with someone in person. Even if we're trying to find an agreeable price, I don't feel like I've lost when we agree, just because he might go a little lower.
My guess is that this has a lot to do with instantly receiving the item in question.