Demand will determine the price of the home deliveries of Kotipizza in May. During the trial, dynamically-priced home deliveries can be ordered from Kotipizza’s online store. In this way, the Kotipizza chain will serve its home delivery customers more flexibly than before.
Dynamic pricing means pricing in which the price is formed on the basis of demand. It has been familiar to many consumers for several years from the buying of flight tickets and hotel bookings. In the last few years, dynamic pricing has become more common across the world in other fields too. Dynamic pricing is particularly popular in online stores, of which Amazon is a well-known leader. Dynamic pricing is also becoming more common in other fields, such as ticket sales for events, and the sale of apartments and taxi journeys.
Dynamic pricing has been tried out in the restaurant sector during the last few years, but Kotipizza is the first Finnish restaurant chain to try it out in association with home deliveries. The trial will be carried out in cooperation with the Finnish dynamic pricing service company Priceff Ltd. As a trailblazer in the field, Kotipizza will offer its customers home deliveries with a price that changes at five-minute intervals on the basis of demand. The price is formed on the basis of demand, varying between €0.10 and €5.90. So the maximum price of a delivery is always the normal price for a delivery, i.e. €5.90. The pricing will be in effect during May from Monday to Wednesday, from 10 am to 4 pm.
“The pricing trial for home deliveries supports our strategy, which emphasises digitality and delivery, and offers an excellent opportunity to present the possibilities of dynamic pricing to the franchisees of Kotipizza and their customers. At its best, pricing on the basis of demand will reduce food wastage and enhance the home delivery of our restaurants. I believe that we can learn a lot from this trial,” says the Customer Experience Manager of Kotipizza Group, Johanna Kuosmanen.
“We’re happy that we can try out an innovative pricing model together with Kotipizza. Dynamic pricing solutions are in use in the restaurant business abroad and we’re proud that we now get to test it in Finland,” says the Managing Director of Priceff, Tiina Laisi-Puheloinen.
Tiina Laisi-Puheloinen, Managing Director, Priceff Ltd. 040 750 7417
Johanna Kuosmanen, Customer Experience Manager, Kotipizza Group 045 326 2240
Kotipizza is a Finnish pizza chain set up in 1987 which had 280 restaurants at the end of the 2018 accounting period. The sales of the restaurants of the Kotipizza chain were 122.1 million euros in the 2018 accounting period. More than 99 percent of the Kotipizza restaurants in Finland are managed by independent franchisees on the franchising principle. A franchisee gets use of a tested and profitable business idea, as well as a ready-made product and trademark, the know-how of the chain and other benefits from cooperation.
Kotipizza Group PLC
The Kotipizza chain is part of the Kotipizza Group, which also includes the procurement and logistics company Helsinki Foodstock Ltd., Chalupa Ltd., which operates the Mexican-style Chalupa restaurant chain opened in 2015, and The Social Burger Joint Ltd, bought in November 2017, which manages the Social Burgerjoint restaurant chain and the Social Food food truck. In the 2018 accounting period, the turnover of Helsinki Foodstock was 71.1 million euros, the sales of the restaurants of the Chalupa chain 2.3 million euros, the sales of the restaurants of the Social Burgerjoint chain 2.9 million euros and the sales of the No Pizza restaurant 0.4 million euros. In the same period, the turnover of the Kotipizza Group was 91.5 million euros and its comparable EBITDA 9.39 million euros.
Priceff Ltd. Is a Finnish company set up in 2016, offering an auto-dynamic pricing service. With the aid of the service, companies can optimise the price of products or services automatically on the basis of demand. Dynamic pricing is best suited to products or services which are not done for stocks (for example, travel services, trips, events) or which have a ‘best before’ date or large variations in demand and supply. The service is also suitable for business activities where rapid sales results are desired by optimising the price. The computation algorithm behind the service was patented in the United States in 2017. The service has been used by companies such as YIT, ResQClub and the Naantali Spa Hotel, amongst others. At the moment, the service is in trial use with significant operators in several different fields.