Recent surveys suggest that nearly 60 percent of shoppers will do their holiday buying online this year. That’s probably not too surprising to most people. But did you also know that many e-commerce websites actually adjust pricing based on your personal information to get the most money they can from each shopper? It’s called “price steering,” and it’s perfectly legal. Here’s how it works.
Let’s say Bob goes online to buy a hammer using his smart phone. The e-commerce hardware site offers the item for $10 with a $2 shipping charge. From his desktop computer at work, John looking up the very same hammer on the same website, but his price is showing at $15 with a $5 shipping charge. The cost variation is based on data collected from each buyer’s Internet device.
Whenever you visit a website it leaves a “fingerprint,” on your computer, smart phone or tablet in the form of cookies, browsing history, and so on. For our example, let’s say Bob and John live in different parts of the country, work in different occupations, and have individual buying habits, so their computers, smart phones and other devices portray a very different “electronic personality,” or “E.P.”
The E.P. information is used to “steer” each buyer to the same product but with different pricing based on the collected data. That level of electronic tracking might sound a bit distressing, but it’s really been going on for quite some time.
Internet users receive a plethora of personalized information every day. As they go about their day-to-day activities, complex programming is used to sift through online profile data and previous online activity, constantly processing it through something called a “personalization algorithm.” If you’ve ever wondered why Amazon knows that you like country music or white tigers, and constantly offers you products related to those things, that’s how they do it.
A similar process is used at grocery and other retail stores, using a combination of product placement and special pricing. I often refer to it as “the milk effect,” because dairy products, meats and other essentials are positioned in the back of the store and shoppers must pass a myriad of floor and end cap displays to get to them.
This “steers” the shopper past all of the sale items, incidentals, and virtually everything else, as they make their way to the household staples. Unlike price steering online, however, this practice is fairly transparent and has few components to allow unique pricing adjustments for each buyer.
User data collection and manipulation may provide many people with better pricing but it can also be used to force others to pay more. A recent study by researchers at Northeastern University brought into question the level of transparency offered by popular e-commerce sites and price steering practices.
Price steering actually happens every day and is well-advertised. In a standard retail setting, for example, senior citizens might get a discount at the movies or a college student pays less for books. And, according to the university’s website, authors of the study note that there is nothing inherently sinister in the processes.
But before you click “buy now,” it’s up to you to make sure you’re getting the best possible price online. Here are a few simple tips to help.
First, clear the browsing history on your device and turn off tracking cookies. Websites can’t access your history if there’s nothing there to see. Be aware, however, that some websites require that cookies be allowed or the site will not work properly.
Next, view the website on different devices. Some of the data collected can tell retailers that you are using an expensive smart phone and may be more inclined to pay more at checkout.
If you’re a regular user of a particular retailer’s website, log out and log in as a guest through another device. Sometimes guests are provided with lower pricing to entice them to buy.
Finally, scroll around, making sure to check the very bottom of the web page. Lower-priced products may be displayed elsewhere besides the top of the page. Do your homework, get the best price and enjoy this holiday shopping season.
(TUNE INTO WDTN-TV2’S LIVING DAYTON AT NOON ON FRIDAY NOVEMBER 28TH FOR A SPECIAL SEGMENT ON THIS TOPIC PRESENTED BY DEER IN HEADLINES AUTHOR GERY L. DEER.)
Gery L. Deer is an independent columnist and business writer based in Jamestown. More at gerydeer.com.