The Internet of Things (IoT) has gone from hype to reality with new products now just a click away from consumers, as demonstrated by last month’s launch of PowaTag, an app enabling consumers to buy products straight from ads in real-time. Some 240 retail brands have signed up, but as IoT matures, what else should we expect?

Well, imagine a world without price tags as we know them, where the price ‘depends’ on any number of variables and your smartphone or IoT-enabled device could provide a dynamic, digital price tag based on real-time information about commodity prices, currency rates and stock performance.

Your latte could be 39p cheaper in the morning than the afternoon if milk prices soared during the day and retailers could use personally tailored information to vary the price to help increase the likelihood of a sale. Indeed, online travel service Orbitz has already started tailoring its pricing based upon a user’s choice of computing platforms, after discovering that Apple users generally pay $20 to $30 more for hotels than PC users.

Dynamic pricing could also be used on higher-frequency, low-cost items. Greggs has launched a mobile app, which beyond the obligatory coffee card and PayPal integration focuses on loyalty through an ‘ease of payment’ offer. Weve is also trialling its mobile wallet and loyalty platform Pouch with Eat.

While variable pricing is yet to be fully realised, platforms like Pouch and Weve generate massive amounts of behavioural data, allowing brands to provide their customers with a personalised service, and ultimately serve that through coupons or non-transparent variable pricing. What’s unknown is how consumers will react to their £1.24 sausage roll costing 15p more on a Tuesday because of rogue trading in the pork bellies market.

Retailers will have to be transparent about how pricing is driven to avoid regulatory intervention. The OFT is already considering the role and impact of these practices. But consumers and retailers could be in for an interesting few years.

Matthew Knight is head of innovation at global media agency Carat