You're not going crazy — you may actually be paying higher prices than other people | CNN Business:
It's hard not to get fired up by how much more everything costs compared to just a few years ago. But people making the same exact purchases as you aren't necessarily paying the same exact prices as you.
This became apparent to me a few weeks ago when a friend texted me that Starbucks was running a buy one, get one free drink promotion. But when I logged in to the app, the offer was nowhere to be found.
Why was my friend getting special treatment?
It's likely that Starbucks used artificial intelligence to determine that my friend, if offered a promotion, would make a purchase they wouldn't otherwise have, whereas I would make a purchase regardless, said Shikha Jain, a lead partner in the North American consumer and retail division at the consultancy firm Simon-Kucher.
The system nailed it for me — just opening the app to check if I had the promo got me to order, and I paid full price.
[...] The Seattle-based coffee chain declined to share what feeds into its AI model, dubbed Deep Brew. A spokesperson did, however, confirm that AI is powering the individualized offers it sends customers.
This personalized promotion strategy is not unique to Starbucks. Companies are increasingly leveraging customer data, often derived from loyalty programs, in coordination with machine-learning models to customize prices of goods and services based on an individual's willingness to pay.
[...] On Tuesday, the Federal Trade Commission sent orders to eight companies — Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture and McKinsey & Co — seeking information on how they allegedly offer surveillance pricing and services "that incorporate data about consumers' characteristics and behavior."
The orders seek to understand how technologies like AI along with consumers' personal information could be used "to categorize individuals and set a targeted price for a product or service," according to an announcement the FTC published Tuesday morning.
"Firms that harvest Americans' personal data can put people's privacy at risk. Now firms could be exploiting this vast trove of personal information to charge people higher prices," FTC Chair Lina Khan said in a statement.
[...] Using AI, companies can now answer questions like, "What is this person going to buy next? What do we think they're going to be willing to pay? Where are they going to buy from? When are they going to buy it?" said Jain.
Matt Pavich, senior director of strategy and innovation at Revionics, an AI company that specializes in helping retailers set prices, said its goal is not to tell retailers exactly how much to charge individual customers. Rather, its bread and butter is to provide companies with "all of the analytics and predictive scenarios" to figure out prices themselves.
Instead of waiting for customers to respond in real time to price changes, Revionics' clients get a toolbox to test out prices in advance. Then, by predicting how much consumers will buy at different price points, Revionics helps retailers manage their inventories.
[...] Mary Winn Pilkington, senior vice president of investor relations and public relations at Tractor Supply Co., told CNN it recently partnered with Revionics because it wanted to more successfully adjust prices to "the ever-changing market" to "attract and retain customers."
The aim of partnering with Revionics wasn't to see how high they can raise their prices without turning away too many customers, she said.
She noted that Tractor Supply Co. does use machine learning "to curate specific offers individualized for customers," although Revionics is not involved in that aspect. This, she said, "often leads to lower prices and better value on the products and services our customers need."
Of course, like my Starbucks experience, it could also very well lead to identifying customers who don't require promotions at all.
(Score: 5, Insightful) by Anonymous Coward on Thursday July 25 2024, @04:39AM (2 children)
> The system nailed it for me — just opening the app to check if I had the promo got me to order, and I paid full price.
A fool and their money are soon parted.
(Score: 5, Touché) by Rosco P. Coltrane on Thursday July 25 2024, @09:23AM
More like "The system correctly determined that I was a sucker, so I behaved like a sucker."
(Score: 4, Funny) by DannyB on Thursday July 25 2024, @01:40PM
A fool and their money are soon partying.
That is a better outcome.
People who can't distinguish between etymology and entomology bug me in ways I cannot put into words.
(Score: 4, Insightful) by Mykl on Thursday July 25 2024, @05:02AM (25 children)
From the dawn of time we have been offering preferred pricing to certain groups.
- Many third-world countries with tourism industries will charge separate prices between locals and tourists
- Most online stores have a "Discount Code" field in the checkout page - I know I am paying more than others every time I see that
- Companies will have special offers for new subscribers or first purchase
- Loyalty cards
All you need to know in order to gain that sweet AI discount is what type of behaviours will get you that discount. I imagine that infrequent (but non-zero) purchases would definitely help.
(Score: 3, Interesting) by Mykl on Thursday July 25 2024, @05:42AM (12 children)
I'm doing my part [youtube.com].
I only purchase chocolate bars (many at a time) from my local Supermarket when they are on special and below a specific price. The Supermarket has been trying to make that special price higher lately, so I've been buying them much less.
(Score: 4, Insightful) by JoeMerchant on Thursday July 25 2024, @06:10AM (6 children)
I used to joke that our local grocery was the $3 store... almost nothing in the store was less than $3. They really pissed me off when they phased in "BOGO - Buy One Get One free" specials... they'd take an item that sold for $3.19, jack it up to $5.79, then one week in 12 it would go on BOGO!!!, such a deal. After they got away with that for a while, they started jacking up the $3.49 items to $7.29 and putting them on BOGO one week in 18. This along with keeping prices flat while shrinking the container sizes, etc.
Luckily we have some choice in grocery chains, so we just stopped going to the big green ripoff market. When COVID lockdown started, we started getting groceries delivered via Instantcart from the less expensive chain, and even with delivery fees and tips the bill was much lower than the big green ripoff market.
🌻🌻🌻 [google.com]
(Score: 5, Interesting) by Rosco P. Coltrane on Thursday July 25 2024, @10:26AM (2 children)
A friend of mine used to run a tire shop. One week he ran a "Buy 4 tires get 1 free" special. I asked him how that was different from the "25% off a full tire set" special he ran the week before. He said people actually rushed to get the free tire a lot more than 25% off because there's "free" in the offer.
Specials appeal to the reptilian brain and people are often happy to let their reptilian brain do the thinking for them.
(Score: 1, Flamebait) by mcgrew on Thursday July 25 2024, @03:53PM
There's a window installer advertising here who has been saying "buy one, get one free ends soon!" They said that for over a decade. Now their ads warn you of sleazy salesmen! All while now offering "free installation."
Those ads about sleazy salesmen is a good example of "gaslighting," the iron skillet calling the aluminum skillet black. Also, see: Donald Trump
Impeach Donald Saruman and his sidekick Elon Sauron
(Score: 2) by ese002 on Friday July 26 2024, @05:03AM
I'm amazed people fell for that one. Only people who own cars that have full size spares can make use of a "buy 4 tires, get one free".
(Score: 2) by aafcac on Thursday July 25 2024, @02:56PM
A lot of those deals are now but one get one half off or buy 2 get one free and the like. As if they weren't making enough money as it was.
(Score: 2) by mcgrew on Thursday July 25 2024, @03:49PM (1 child)
Luckily we have some choice in grocery chains
Even luckier, we here in Springfield have a grocery store that is not part of a chain, locally owned since 1932. I buy all my food except coffee there, their coffee is about twice the price as Walgreen's. We have the chains, including Walmart and Hy Vee. I hate the chains.
This town is weird. That grocery is in the ghetto, the "food desert" is on the north end where most people are working class.
Impeach Donald Saruman and his sidekick Elon Sauron
(Score: 3, Funny) by owl on Thursday July 25 2024, @05:25PM
The Kwik-E-Mart???
(Score: 1) by anubi on Thursday July 25 2024, @01:09PM (3 children)
I note at my local WalMart, they still sell 2-liter soda pop ( brands I never heard of ) for a buck. I am convinced it's the same stuff. It's just a bottle of carbonated water with a bit of flavoring. And its sold to customers with no promotional expenses. It's just there.
That's the one that I put in my cart. Those three dollar bottles of name brand pop stay on the shelf. Those are the ones that generate nice returns for investors and pay high executive salaries. The ones I buy probably barely keep an indie bottling plant online.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 2, Informative) by Runaway1956 on Thursday July 25 2024, @02:27PM (2 children)
You've probably heard this before. You can walk into almost any food factory, and see 3, 6, 9 or more different brands of cans, bottles, whatever. The same factory that makes the famous name brand pickles also makes various store branded pickles. There may be some slight variation in quality control - that is, a cucumber with some blemishes might be acceptable when doing store brands, but totally unacceptable for the name brands. The same is true of most consumer products - the famous name brands are produced and packaged side by side in the very same plant.
The above does not imply that all products from that plant are equal quality. Changing the protein content in dog food, for instance, is just a matter of changing the ratios of the contents - dial down the meat byproducts feed, and dial up the cereal products feed, and you have a different product that meets the customer's specifications. A "fortified vitamin rich" feed requires a little more from the additives feed line.
There are some exceptions, primarily with those carbonated drink producers. Coca Cola, to my knowledge, does NOT produce any store branded products. Those plants that I have been in have nothing anywhere in sight that might be confused with a competitor, or with any store brands.
But, you are certainly correct that all the soda water on the shelves are basically the same. There is no "magic ingredient" that makes one brand superior to another. A technician can tweak the settings on the automated equipment, and reproduce almost anything you specify.
“I have become friends with many school shooters” - Tampon Tim Walz
(Score: 2) by Freeman on Thursday July 25 2024, @02:33PM
Barqs is best, it's about the only Root Beer you can find nowadays that has caffeine.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 2) by Reziac on Friday July 26 2024, @02:52AM
You can frequently tell by reading the label.
This is how I know that Walmart branded hash is actually Mary Kitchen hash.
Other things... are pretty clearly seconds, or much better or much worse.
But as you say a whole lot come from the same plant, dialed up or down to customer specs.
Look at the place of origin on that super-duper specialty dog food. If it says "Meta, Missouri" it's made by Diamond. (Almost none of the "specialty" brands own a feed mill; it's nearly all contracted.)
And there is no Alkibiades to come back and save us from ourselves.
(Score: 2) by mcgrew on Thursday July 25 2024, @03:42PM
I only purchase chocolate bars (many at a time) from my local Supermarket when they are on special and below a specific price.
I buy mine in bulk from Amazon. Chocolate lasts a long time in the refrigerator.
Impeach Donald Saruman and his sidekick Elon Sauron
(Score: 3, Interesting) by JoeMerchant on Thursday July 25 2024, @06:05AM (9 children)
>Many third-world countries with tourism industries will charge separate prices between locals and tourists
The Eastern Caribbean facilitates this with the "EC dollar" which is worth about 1/3 of the US dollar. Good shops will accept US dollars and give you the appropriate conversion. Tourist ripoff shops will accept either EC or US dollars at 1:1.
>Most online stores have a "Discount Code" field in the checkout page - I know I am paying more than others every time I see that
I don't know why they continue to do this... every time I see that field I get pissed off at the store and am much less likely to return, or even purchase in the first place.
>Companies will have special offers for new subscribers or first purchase
Yet another pet peeve, particularly our local Cable internet provider: $20 per month for the first year, but now we're at $80 per month for the same service...
>Loyalty cards
Several grocery chains have these, and the cashiers keep a card under the register for customers who don't want to carry their own card but still get the immediate discounts... but, you're still losing out on their "cumulative benefits" plans where you get some percentage back from your overall purchase totals, like "buy $1000, get $20 in free stuff..." It's enough to keep me out of their stores.
The worst I have suspected is Amazon, where you look at a product, see a good price, come back later and the low price is no longer there... another great way to remind me: I never needed it in the first place, and the best way to save money is not to buy it at all.
🌻🌻🌻 [google.com]
(Score: 4, Insightful) by PiMuNu on Thursday July 25 2024, @07:46AM (4 children)
> buy $1000, get $20 in free stuff
This always confuses me. If I see a "2 % off" deal I ignore it - it is in the noise compared to product/brand choice where the savings can be 50 % or more. And yet somehow a "2 % off" deal with loyalty cards is worthwhile?
(Score: 3, Touché) by Gaaark on Thursday July 25 2024, @12:47PM (2 children)
Just look at the seasonal items: people will pay full price before the season ends (Valentines day), but won't touch it after unless it's a REAL good price like 90% off.
So, just buy it the day after... but no... you're loved ones NEED it before or on the actual holiday day.
We need to train ourselves that we NEED it at the lowest price!
--- Please remind me if I haven't been civil to you: I'm channeling MDC. I have always been here. ---Gaaark 2.0 --
(Score: 2) by Freeman on Thursday July 25 2024, @02:39PM
Most of the seasonal junk is exactly that or at best, just re-branded X item. In the event that I see a very attractive price and happen to be shopping when they have their sale, I'm a lot more likely to pick it up. Cake mix with valentines sprinkles vs regular cake mix. Do I care? No. Kiddo will enjoy it either way.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 2) by helel on Thursday July 25 2024, @03:27PM
That does depend allot on the seasonal item. Halloween decoration before Halloween? Useful. Halloween decoration November first? I guess in theory it has the same function it did a day ago...
(Score: 2) by quietus on Thursday July 25 2024, @02:46PM
Yes, it is.
When you buy with the 2% off, this profiles you as a customer with a low willingness-to-pay (WTP), just like people who use coupons. This is important information. If the majority of your buyers are people with high WTP, you'll stress the value of the product i.e. its qualities; for customers with a low WTP, you stress the cost/price.
Another reason for that 2% off could be that the seller is trying to avoid a price war with a competitor: the 2% reduction might make that product's price just a bit lower, but due to the reduction, which might or might not be temporary, that price difference might slip under the radar.
A third reason might be that the seller is doing some price probing -- trying to find the sweet price spot to maximize profit.
And a fourth reason is that a sizeable proportion of buyers simply refuses to buy anything that isn't on sale.
(Score: 2, Interesting) by anubi on Thursday July 25 2024, @12:46PM (2 children)
>Most online stores have a "Discount Code" field in the checkout page - I know I am paying more than others every time I see that.
---------------------
I DDG the site name + Discount, and that often nets me a string to fill in that field. If that does not work, abandon the cart and restart searching the net for the item, as now I know I am likely overpaying so someone else gets the discount.
So, instead of a SALE, the merchant now only has a log entry in his system of an abandoned cart with an invalid discount code entered in it.
Considering the costs internet businesses pay to drive visitors to their web store only to discover after all that expense of luring the customer to his store, his own system aborted the purchase. Everyone but him got paid. And his customer went elsewhere.
The simple word "expires" printed on coupons often redirects my purchase.
Everyone made money but the business owner (BO). The guy who sold the advertising promotion to the BO got paid. The artist who designed the coupon got paid. The guy who manufactured the paper got paid. The guy who printed the coupons got paid. The guy who distributed the coupons got paid. The sales clerk who had to tell the customer that the coupon has expired got paid. The BO paid for all of it. The customer shakes his head and abandons the purchase, miffed because he went out of his way because of that coupon, and is now researching the BO's competition to meet his need. All because of ONE WORD.
"Expires".
I don't know why businessmen love that word so much. All it does in practice is encourage people to file the business offers in the circular bin as they sort their incoming mail, as they know the offer will likely be void before they will be in a position to purchase the good.
I think this paradigm originates in universities offering degrees in Marketing. They are Sellers, and don't think like a Buyer. They assume the buyer will still buy even after he discovers he has to pay more because he is ignorant or didn't jump fast enough. University professors get paid a lot more than most of the prospective customers of the BO's who are seeking their business degrees. They don't think the same way as a penny pinching customer, already in debt, trying to make ends meet. I get the idea the well paid business class instructor doesn't have a good personal understanding of people trying to get the most out of their dollar. And they teach the BO's to make a game out of it. Yeh, tease the customer with strings attached. It's a game. They' ll love it.
No, we don't. We know they are toying with us so the rich buyer won't waste his time with trying to get the discount. The BO will still turn a profit on a coupon sale. Just not as much
However, all the people in the coupon advertising business love that word, for the same reason businesses love the "enforced obsolescence" by expiry. They get paid over and over again to generate junk mail for everyone else. All they have to do is slip that one word onto their work, then the BO has to make another round of paychecks for them when he wants to keep his stream of coupon-motivated buyers coming in.
The BO has an "advertising budget" for that sort of thing... financing streams of junk mail. I guess that frustration is meant to discourage those who don't really need it from using it.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 2) by Gaaark on Thursday July 25 2024, @12:50PM (1 child)
Some DO. Like in the article: his friend got it at a lower price. He paid full price.
Peoples is dumb.
--- Please remind me if I haven't been civil to you: I'm channeling MDC. I have always been here. ---Gaaark 2.0 --
(Score: 1) by anubi on Thursday July 25 2024, @01:31PM
My take is there are a lot of people out there who are not as price-sensitive as I am. Those people aren't going to spend a lot of their time dickering for savings. Those people are much rarer, but can be much more profitable. A database of those pretty insensitive to price would probably be quite valuable.
These are people who don't think a thing of spending a thousand dollars for a purse, or pair of shoes.
If you get on that list, you get the star treatment...and pay for it, and then some.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 3, Informative) by Reziac on Friday July 26 2024, @02:54AM
Hell, I've reloaded the page on Amazon and the good price disappeared... and I went off to eBay and found the good price from the same seller.
And there is no Alkibiades to come back and save us from ourselves.
(Score: 2) by Gaaark on Thursday July 25 2024, @12:42PM
Stores within the same city will have different pricing: stores in 'rich' areas will charge more than the same branded store in 'low income' areas.
--- Please remind me if I haven't been civil to you: I'm channeling MDC. I have always been here. ---Gaaark 2.0 --
(Score: 3, Informative) by helel on Thursday July 25 2024, @03:34PM
In the case of the discount code field, that's just a standard part of most e-commerce platforms today. Might as well complain about operating systems that "hide" options in "menus." Your typical mom-and-pop shop is badly capable of setting up inventory in an online store - They're not scouring through interface options to turn off a field they don't use.
(Score: 2, Insightful) by Anonymous Coward on Thursday July 25 2024, @01:02PM
Many people, maybe even most, don't care. They just want to buy what they want. The frugal will always search around for cheaper stuff and look for the best deal, but others will just buy it and be done. If the price is different from advertised, people will raise a fuss, but otherwise they just go ahead and don't bother searching for a discount.
(Score: 3, Interesting) by Username on Thursday July 25 2024, @02:40PM
Scanning your groceries at the self checkout, $100 to $200 per item. The next person comes up, scans her groceries, $10 to $20 per item, because they have a better social score since their race, religion and job are slightly different than yours.
(Score: 4, Interesting) by SomeRandomGeek on Thursday July 25 2024, @03:56PM (1 child)
I think that soon we will see a rise in consumers turning the tables on the producers. Consumers are vulnerable to having their psychological weaknesses being exploited. Producers have always had their little games to do this, like putting a rack of impulse buys by the checkout counter. But producers are vulnerable because they need to actually sell something. Consumers have so many products and producers to choose from that it is easy for them to walk away.
Imagine something like fair trade certification on a grand scale. As a consumer, you get a membership in one or more organizations that rates products on dimensions that matter to you: price, quality, honest labeling, environmental impact, social justice, whatever your thing is. Your organizations rate products. You buy the products with the high ratings. If products don't want to get rated, fine. You don't buy them. If merchants done want to make it easy for you to use the ratings, fine. You don't buy there.
(Score: 2) by Goghit on Sunday July 28 2024, @03:22AM
Already exists for the right wing - there's organizations providing apps that give you a company's wokeness score or whatever the culture war trigger du jour is.
So far it just seems to be another grift.
(Score: 2) by AlwaysNever on Thursday July 25 2024, @05:22PM (1 child)
After plastic-money, we will get to info-money. And AI will rule info-money.
Take refuge in hard cash, or you will be herded.
(Score: 0) by Anonymous Coward on Thursday July 25 2024, @05:46PM
Buy Gold Now!