AI may change the price of your Big Mac and groceries
As retailers turn to AI tools to streamline operations, experts warn that collecting more detailed consumer data increases the risk of personalized pricing.
TL;DR
- Fast-food giants and supermarkets are deploying AI tools that could affect shopper prices.
- A lawsuit alleges McDonald's uses an AI "pricing engine" to set menu prices.
- Retailers like Kroger are using AI for markdown perishables and electronic shelf labels (ESLs) for dynamic pricing.
- Experts warn AI could enable personalized pricing, charging consumers close to their maximum willingness to pay.
- This could make measuring inflation more difficult as prices become more individualized.
- AI allows companies to collect extensive consumer data, blurring the lines between dynamic and personalized pricing.
- Some U.S. states are introducing legislation to curb data-driven pricing practices.
- While dynamic pricing can offer discounts, the risk of personalized pricing is reduced consumer awareness and price comparison ability.
- Personalized pricing can "splinter the consumer experience," leading to households facing different inflation rates.