Today I read in the NYTimes about a company creating e-scores for individual consumers. Which is basically a measure of whether you are likely to spend money and what to pitch to you.
In other news, some supermarkets like Krogers are already starting adjust prices (coupons) based on what you buy. The theory is that coupons can be targeted to customers where the coupon will make the difference in buying vs not buying. Seems like it harms the consumer though. If one buys Tropicana Orange Juice every week, why provide a coupon to that customer. He's hooked. Whereas someone who goes to different stores or buys different products gets a discount to try something new. That's a strong incentive to not use the loyalty cards unless something is on sale that requires it. I've probably used my supermarket card twice int he past year - on the rare occasion a sale only applied if you used the card.
This whole thing feels creepy though. Should a movie star pay $100 for said orange juice because he can afford it? That's not how stores work. But it is the logical implication of this system.
Note that escores claims to only use this system for evaluating potential customers. Even if that is true now, I don't think it will be for long. And Krogers is already starting to do the charging different prices thing. The last paragraph of the NYTimes article really says it:
“I’m troubled by the idea that some people will essentially be seeing ads for subprime loans, vocational schools and payday loans,” Professor Pasquale says, “while others might be seeing ads for regular banks and colleges, and not know why.”
I'm positive I've already noticed "diminishing returns" checkout coupons for products I buy at the Giant nearby. If you use a checkout coupon, then they are very likely to give you another, less valuable one (a "$1 off two" coupon will lead to a "$1 off three" coupon.)
Jeanne Boyarsky wrote:This whole thing feels creepy though. Should a movie star pay $100 for said orange juice because he can afford it? That's not how stores work. But it is the logical implication of this system.
You do know that a Chevy Tahoe and a Cadillac Escalade are the same truck, right? You can get every feature that the Caddy includes on the lower priced Chevy. But if you go to a Cadillac store, you pay more money.
While a single store doesn't charge different prices to different people, in the real world, there are lots of stores that sell the same products for more money. Think Nordstrom vs Macy's.
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Pat Farrell wrote:While a single store doesn't charge different prices to different people, in the real world, there are lots of stores that sell the same products for more money. Think Nordstrom vs Macy's.
Yes and that is fine. People are choosing to go to the more expensive store for prestige or the like. If we both go the Macy's, I expect we both get charged the same thing. Or you get charged less for having the store card or a coupon.
And you know what the rules are to get the lower price. If you choose not to have a store card, you pay more. Tradeoff. What if there were secret cards that you could only get if you were X. That's what this e-score thing is like.