A Wall Street Journal investigation has uncovered a troubling trend for online shopping – price alterations based on your location.
The newspaper specifically looked into Staples’s online store and a handful of others, but what it discovered is part of an overall trend. While many consumers expect online comparison shopping and online deals to be pretty standard across the board, unbiased Internet shopping is giving way to a tailored deals delivered to target demographic groups.
Is online shopping really the best deal? For years, shopping online has been equated with finding the best deals – and a person’s ability to quickly compare prices across several different websites put consumers in control. Web retailers, however, have been eager to find a way to gather information about consumers and use it to adjust prices or even offer special deals to repeat visitors. This same collection of data is often used for online media buying and targeted advertising, but the Journal’s study shows that the information is being used slightly differently by online retailers.
For example, one shopper logs into the Staples site and sees a stapler offered at $15.79, but another consumer in the test group who lives just a few miles away was offered a price of $14.29 for the same item. The latter participant’s physical proximity to a brick and mortar competitor triggered a secret discount that was only offered to her.
Not just Staples. In addition to the Staples study, the Journal also found several companies like Rosetta Stone and Home Depot that were adjusting prices or displaying different products based on consumer data. There are several formulas that retailers use to determine price breaks for certain consumers – from their browsing history to physical location to demographic based information (like the zip code of their IP address).
Although it’s a very common practice for offline retailers to adjust their price based on local demand, many consumers have been surprised to see customized product suggestions or even price breaks when shopping online. Some consumer groups worry that the practice is diminishing the Internet’s role as an equalizer and keeping prices higher in areas with less competition – which are typically poorer or in rural areas.