Oren Etzioni writes articles about artificial intelligence for scholarly journals, is a renowned expert on data mining and gained fame when Microsoft paid $115 million for Farecast, an airline-ticket price predictor he founded.
Now, Professor Etzioni, who teaches computer science at the University of Washington, has directed his considerable intellect at the American ritual of shopping for bargains on Black Friday. After examining billions of prices of consumer electronics, he has decided to spend the busiest shopping day of the year scuba-diving in Bali.
Why? It is not until early December, professor Etzioni?s research shows, that prices are likely to be the lowest for electronics, products that are among the biggest sellers on the Friday after Thanksgiving.
?The bottom line is, Black Friday is for the retailers to go from the red into the black,? he said. ?It?s not really for people to get great deals on the most popular products.?
What the professor has determined with a complex computer algorithm for consumer electronics, others have found through less scientifically rigorous means for other products, including clothing and toys: Despite all the ads that suggest otherwise, the lowest prices tend to come at other times of the year.
In the case of toys, stores actually offer the steepest discounts in the weeks immediately following Thanksgiving because they want to unload the inventory not swept up on Black Friday, said Dan de Grandpre, who has tracked deals for 15 years at Dealnews.com.
?Toys have a very short shelf life,? he said. ?On December 26, they?re not really useful to retailers anymore, so they have to get rid of it and start slashing prices early in December.?
And it is a precise window of opportunity. In the week or so before Christmas, toy prices shoot back up, de Grandpre?s tracking shows, as last-minute shoppers come stampeding for Barbies and Lego sets and stores are less desperate ?because they?ve been able to reduce their inventory?.
The added value Professor Etzioni brings to price discussions is the computer crunching of the trove of data provided by online prices ? and specific recommendations about when to make a purchase.
Following the approach of Farecast, now part of Microsoft?s Bing search engine, the professor?s start-up company, Decide.com, studies current and historical prices, information about new models and rumours about new product introductions to figure out the best time to buy.
Type in the name of a product ? a Soundcast SurroundCast speaker system, for instance. Decide.com will pull prices from around the web, and tell you to buy or wait. In the SurroundCast case, it showed this week that prices were at $150 in early September and had now gone up to $160.
The verdict: Wait. Decide.com said it was 96% confident that prices for the speaker system would drop within two weeks. Introduced this summer, the website predicts prices for consumer electronics only, though Professor Etzioni says there are plans to expand to categories like cars and potentially even clothing in a couple of years. In the meantime, others are making educated guesses about when it is best to spend money on variety of products.
?Black Friday is about cheap stuff at cheap prices,? de Grandpre said.