How your data can be used to price you
Dynamic pricing. Surge pricing. Personalized pricing. AI-Driven Pricing.
These are some of the terms that describe how companies – big and small – are manipulating the the amount consumers pay for their products. They all work a little differently. And they rely on different sorts of data – from wider economic trends to our own personal information. And thanks to years of digital conditioning, we’ve come to assume, if not expect, that some sort of algorithm is running pricing strategies.
We sit down to talk about what these different pricing strategies are, why digital price tags are making some nervous, and what that all means for you.
Below are five statements from major American companies…
Amazon:
“Amazon offers all customers the same everyday low prices for products in our store, and we don’t use personal information to charge customers higher prices.”
Walmart:
A Walmart spokesperson reiterated CEO John Furner’s statement: “We price products, not people” and directed us to the open letters from John and Executive Vice President, Corporate Affairs Dan Bartlett
McDonald’s:
“These speculative and uninformed claims attempt to recast a standard business practice as something controversial. AI does not set the price of a Big Mac or any other menu item. The use of pricing recommendation tools and analytics is widespread across industries. McDonald’s franchisees make their own pricing decisions. The pricing portal is a tool, not a mandate, designed to provide restaurant-specific recommendations to help franchisees deliver value for customers and make informed business decisions.”
Home Depot:
“We offer everyday low prices to our customers. Our product prices are based on business factors, and we do not use a customer’s personal information to increase the prices offered to them.”
Instacart:
“Instacart does not engage in surveillance pricing and, as we’ve repeatedly stated publicly, we never will. We will never use personal information – protected characteristics, demographic data, or individual shopping behavior – to determine item prices, membership prices, or fees. We are committed to transparency, and remain focused on lowering costs for our customers.”
