Do You Wonder If You’re Getting the Same Online Price as your Neighbor? You may not be!

According to a great Wall Street Journal article, “Websites Vary Prices, Deals Based on Users' Information,” where you live makes a big difference in the price you are offered online. 

Here is how the Journal puts it:

A Wall Street Journal investigation found that the Staples Inc. website displays different prices to people after estimating their locations. More than that, Staples appeared to consider the person's distance from a rival brick-and-mortar store, either OfficeMaxor Office Depot Inc. If rival stores were within 20 miles or so, usually showed a discounted price.

And it’s not just Staples; Home Depot does the same thing as do other ecommerce providers

The Journal found that in 90% of the cases it checked, the biggest single reason for a lower price was a shopper’s proximity to a retailer’s competitor.  What was a littler disconcerting, however, is that there are unintended consequences.  Here is how the According to the Journal:

But using geography as a pricing tool can also reinforce patterns that e-commerce had promised to erase: prices that are higher in areas with less competition, including rural or poor areas. It diminishes the Internet's role as an equalizer.

What is interesting is that it is not illegal and, when you think about it, bricks and mortar stores have been adjusting prices by location for years.  I think the difference may be that ecommerce shoppers somehow fee l that the Internet’s transparency makes it a more egalitarian place.   So it’s a little freaky to think that your neighbor down the road, because he or she lives in a different zip code, is getting a better price than you are.

So what do we learn from all of this?  I think three things:            

  1. The Internet allows retailers to take micro marketing to new levels of individuality.           
  2. The Internet is not the fair-play environment we thought it was.
  3. Lower income people just don’t get much of a break, whether it’s in the virtual world or the real one.

The Wall Street Journal article in question was written by Jennifer Valentio-Devries, Jeremy Singer-Vine and AshkanSoltani




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