This article is conflating digital pricing labels with dynamic pricing. Not saying dynamic pricing could never happen, but it is not happeing now as the article says.
“Through a partnership with Microsoft, Kroger plans to place cameras at its digital displays, which will use facial recognition tools to determine the gender and age of a customer captured on camera and present them with personalized offers and advertisements on the EDGE Shelf.”
Then in the next paragraph:
“EDGE will allow Kroger to use customer data to build personalized profiles of each customer … quickly updating and displaying the customer’s maximum willingness to pay on the digital price tag—a corporate profiteering capability that would be impossible using a mere paper price tag,” they wrote.
That's exactly dynamic pricing save that the driver is not external factors (weather, proximity to Thanksgiving) and the price is not universal. It's adjusting the displayed price of an item based on the identity of the person looking at it to target a specific price to an identified consumer. A very fine-grained value of 'dynamic'.
I'm not sure dynamic pricing could happen at a grocery store. For their online sales sure but in-person the digital labels show a price and that price needs to match what it does at the register [1] [2]. What are they going to do? Kick everybody out of the store for 30 minutes while they up all the prices?
> Ms. Warren highlighted on social media how digital pricing could enable stores to implement surge pricing, such as increasing the cost of water or ice cream during hot weather or raising turkey prices before Thanksgiving.
The example from the article doesn't even require digital pricing. The weather is a fairly known event day-to-day and the calender even more-so.
As somebody who hoards way to many receipts; prices have been going up even at stores with paper prices (which is like all that I've ever seen).
They actually do this in Norway. The prices can only go down during the day and reset the next day. They even hire price spotters to watch the prices at competitor chains.
Why would the register not be relying on the same database as the digital labels? This is how it works at lots of stores in the UK which have digital labels varying the prices day-to-day.
In many countries laws tell that customers cannot be charged more than the price displayed on the label. If the price was X when customers put an item from a shelf to a trolley but synchronously increased on the label and in the database to 2X while a customer was on a way to a till he’ll be asked to pay 2X which may not be legal but even if it is it would cause a backlash.
I've seen some backlash where folks would abandon cart at the till, or ask to remove the item and leave it there at least, causing quite some chaos/delays overall. And that's just user error/misreading a label. Pretty sure if pricing is unpredictable between displays and the till often enough, people will just go shop elsewhere and/or regulation would eventually be created if it doesn't already exist...
The other thing is for folks who can afford to pay more, I'm not sure they even look at the prices on the shelves. I assume they may rather look at the end total and only check individual items if the end bill is abnormally high, in which case if everything was upped a little based on profiling, it might not be noticed unless googled or compared to another store?
I guess those behaviours may not be correlated to income, but all in all I have a hard time imagining this system resulting in either tiny optimizations that may be profitable in agregate or a net loss of clients/sales if it is too noticeable...
“Through a partnership with Microsoft, Kroger plans to place cameras at its digital displays, which will use facial recognition tools to determine the gender and age of a customer captured on camera and present them with personalized offers and advertisements on the EDGE Shelf.”
Then in the next paragraph:
“EDGE will allow Kroger to use customer data to build personalized profiles of each customer … quickly updating and displaying the customer’s maximum willingness to pay on the digital price tag—a corporate profiteering capability that would be impossible using a mere paper price tag,” they wrote.
That's exactly dynamic pricing save that the driver is not external factors (weather, proximity to Thanksgiving) and the price is not universal. It's adjusting the displayed price of an item based on the identity of the person looking at it to target a specific price to an identified consumer. A very fine-grained value of 'dynamic'.