Caveat emptor.com: Online firms are getting better at calculating how much they can sting you for
Posted in: Internet Use/New Technologies at 01/07/2012 14:36
The internet was supposed to be the consumer's friend. By making it easy to shop around, it would drive prices lower. But online sellers of all sorts of goods and services are taking a keen interest in new software that promises to help them spot customers who are well off, or whose money is burning a hole in their pockets, so as to charge them more.
Online shoppers let slip plenty of information about themselves that could be of use to crafty salesmen. Cookies reveal where else they have been browsing, allowing some guesses about their income bracket, age and sex. Their internet address can often be matched to their physical address: the richer the neighbourhood, the deeper the pockets, it may be assumed. Apple computer-owners are on average better-off than Windows PC users, and firms may offer them pricier options, as Orbitz, a travel website, is doing. Your mouse may also be squeaking on you: click too quickly from home-page to product page to checkout, and the seller can conclude that you have already decided to buy -- so why offer you a discount?
Personalising online prices: How deep are your pockets? Businesses are offered software that spots which customers will pay more
In many types of face-to-face retailing, it pays to size up your customer and tailor your offering accordingly. In a 2006 study of Fulton fish market in New York, Kathryn Graddy of Oxford University found that dealers regularly charged Asian buyers less than whites because the Asians had proved, over time, more willing to reject high prices, and readier to band together to boycott dealers who ripped them off.
The internet, by allowing anonymous browsing and rapid price-comparing, was supposed to mean low, and equal, prices for all. Now, however, online retailers are being offered software that helps them detect shoppers who can afford to pay more or are in a hurry to buy, so as to present pricier options to them or simply charge more for the same stuff.