How Retailers Use Personalized Prices to Test What You’re Willing to Pay

News. Depending on how much a traditional salesperson – or the computer system knows about you – that is typically the price you get. The key question is whether personalized pricing in-store as well as on the web, is ethical. 

A traditional car dealer looks at you when you enter his store. How you dress, the car you drive, and answers to seemingly innocuous questions – like where do you live – provide clues.  Evaluating each shopper’s characteristics and actions creates a pricing profile. Web retailers can similarly profile their shoppers. Is a shopper using a laptop, app, desktop, or internet on their smartphone? What operating system, which location? What other products are they looking at? How many times have they visited the site? Web retailers can electronically evaluate the characteristics and actions of each shopper to create a profile that generates a personalized price.

Such are the words in a Harvard Business Review story, who poses the question whether personalized pricing is ethical. The author concludes:

Whether personalized pricing catches on with web retailers is now up to consumers. Will shoppers be comfortable knowing that the prices they are offered may be higher than those presented to others? Will buyers relish “electronically bargaining” to outwit sellers? Retailers first “negotiate” with each customer by personalizing prices based on their profile. In response, savvy shoppers will “bargain” by checking prices on different devices, clearing caches, using the app, conducting multiple searches, asking friends in different cities to see what price they’re quoted, and so on. Or will they become fed up and steer clear of web retailers that price profile?

Read the story in HBR here

From an individual point of view, most shoppers will find personalized pricing discriminatory and will want to find what they believe is the best price: the cheapest. You can start using privacy tools like a third-party cookie-blocker and VPN. Read more about it here:  Get Cheaper Prices With Privacy Tools

 

 

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