Shoppers grow wary as US retailers adopt AI-assisted pricing tools
Walmart is rolling out digital price tags as fears of "surveillance pricing" spread. Maryland, New Jersey and Connecticut already limit using personal data to set prices.
Symbolic image · Photo: Maheshod98 / Wikimedia Commons, CC BY 4.0 (cropped and resized)
Consumers in the United States are increasingly uneasy about prices set with the help of algorithms and artificial intelligence, with terms like "dynamic pricing" and "surveillance pricing" spreading on social media, The Associated Press reported Sunday. Walmart and Whole Foods are adopting digital shelf labels. "We price the product, not the person," Walmart CEO John Furner said.
A Simon-Kucher survey of more than 2,200 business leaders in 28 countries found 41% use AI for market intelligence such as competitors' prices, and 28% for real-time price optimization. Target paid $5 million to settle a California lawsuit and agreed to stop using geofencing to raise prices. McDonald's called a consumer lawsuit over its pricing system "filled with inaccuracies."
Maryland, New Jersey and Connecticut have restricted the use of personal data to set prices, and lawmakers in at least 30 states considered pricing bills this year. The Federal Trade Commission has proposed an enforcement policy warning that undisclosed use of personal data for individualized prices could violate consumer protection law. Changing prices throughout the day, as airlines do, "is exceedingly rare" in retail, said Asa Farquhar of Relex Solutions.