You could be paying more than your neighbor for the same item, purchased at the same time, via the same online retailer.
How could this be? Some online retailers now use pricing systems—called “dynamic,” “variable,” “discriminatory,” or the more consumer-friendly “personalized”—in which the same exact item is listed at different costs depending on who is doing the shopping, and specifically based on what items the consumer has purchased in the past, and at what price. The point of variable pricing, of course, is for retailers to get as much money from as many shoppers as possible.
Dynamic or personalized pricing does this by maximizing the possibility that consumers will make a purchase (by lowering the asking price in certain situations) and by maximizing the amount each purchaser is willing to pay (by keeping prices high for consumers who have demonstrated a likelihood of buying). This is all accomplished with the help of creepy online “behavioral tracking” that I’m not going to try to explain—because I can’t pretend to understand it. All I’ll say is that the concept gives me the uneasy feeling I’m constantly being monitored, or e-stalked, if you will.
A Slate story (via the Wash Post) gives the gist of how dynamic pricing works:
In its most brazen form, it works like this: Retailers read the cookies kept on your browser or glean information from your past purchase history when you are logged into a site. That gives them a sense of what you search for and buy, how much you paid for it, and whether you might be willing and able to spend more.
They alter their prices or offers accordingly.
We all know that sales last for limited times, and that prices are subject to change. But the idea that a retailer is willing to sell the same item at the same time at a wide range of prices seems unfair and distasteful.
What’s particularly interesting is that prices may vary not only based on the person doing the browser, but sometimes based on the browser being used for shopping. Consumers using, say, Chrome may occasionally view entirely different shoe prices and credit card offers than their counterparts using Firefox.
The strategy may result in some extra revenues for retailers. But awareness of such pricing systems increases, it’ll make consumers feel annoyed, confused, even paranoid—that they’re getting screwed over even when they’re not. If this is what it means to get personalized attention, I’d rather be anonymous.
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