Summary: Except for auto dealerships, retailers don't use personalized prices.
What a terrible article:
1) Its first example of "personalized pricing" isn't actually personalised: it was the result of an A/B test.
2) It says 'Outsize profits can be extracted from “top of the demand curve” customers' when, in fact, the top of the demand curve is normally when price is zero. The author seems to acknowledge this as they reference 'the downward sloping demand curve highlighted in Economics 101'.
3) The only convincing example given in the article is that of 'auto dealerships', which are the least typical retailers there are. People hate going to auto dealerships, but they love doing other types of shopping, in-person or online. Part of the reason is the personalized pricing (and process of haggling), but this has existed for many years, and the rise of the internet has actually made it easier for consumers, not harder, to get a reasonable deal.
4) "A key question is whether personalized pricing, on the web or in-store, is ethical." A better question would be 'How do retailers use personalized prices?'. That's the question I thought would be answered, given the title. The author's answer seems to be "Except for auto dealerships, they don't".
Just For U is a comical disaster if a flop. It's the sort of user friendliness/usability you expect from the marketing team of an old grocery story -- an A/B -test driven development by finite monkeys at keyboard
With the Safeway app, you don't get exactly the same coupons as your friend, but in my experience they're almost the same set. However, the app does achieve price discrimination without personalisation: people that are money-rich but time-poor won't bother checking the app for coupons before they go to the checkout, so will pay more than someone who pinches pennies.
But this form of price discrimination is not personalised. It's the same as that achieved with coupons published in magazines.
That's not personalisation. Many (most?) people use both web and mobile. And do you always remember to log in before you do a search on Orbitz? Or are you sometimes logged in and sometimes not?
What a terrible article:
1) Its first example of "personalized pricing" isn't actually personalised: it was the result of an A/B test.
2) It says 'Outsize profits can be extracted from “top of the demand curve” customers' when, in fact, the top of the demand curve is normally when price is zero. The author seems to acknowledge this as they reference 'the downward sloping demand curve highlighted in Economics 101'.
3) The only convincing example given in the article is that of 'auto dealerships', which are the least typical retailers there are. People hate going to auto dealerships, but they love doing other types of shopping, in-person or online. Part of the reason is the personalized pricing (and process of haggling), but this has existed for many years, and the rise of the internet has actually made it easier for consumers, not harder, to get a reasonable deal.
4) "A key question is whether personalized pricing, on the web or in-store, is ethical." A better question would be 'How do retailers use personalized prices?'. That's the question I thought would be answered, given the title. The author's answer seems to be "Except for auto dealerships, they don't".