Canada’s largest city is acting to outlaw surveillance pricing – a more complex application of what in the past has been called ‘opportunity’, or ‘surge’ pricing. Now it’s possible to for AI systems adjust the price you pay based on your personal information…
“No one should have a different price based on who you are,” Toronto Mayor Olivia Chow told report-ers outside a recent committee meeting. “That’s just not fair.”
“We will fight the rising costs of groceries and protect Torontonians from being gouged by corporate giants looking to maximize their profit on the backs of regular people,” Chow declared. And she und-erlined the gravity of the problem pointing out that many Torontonians are already struggling to afford enough decent food to to sustain themselves.
Easier said than done…
Enforcing such a ban is not as easy as it may sound. Toronto City Council has approved a year-long study into what it will take to, “ban and regulate surveillance pricing (SP) that increases prices on groc-eries, including those sold online and delivered within the city.”
The study report is due a year from now. And it will be racing the implementation of SP by major retailers who already possess personal information on millions of their customers.
How it works
Surveillance pricing can use the personal information volunteered by a shopper when registering for a ‘rewards’ program to determine how much the customer can afford to pay. Even what they may be willing to pay.
Algorithms can track real-time inputs including your search behavior at the store’s website and prev-ious purchases. They can also take into account how affluent – or otherwise – your home neighbour-hood may be. At the end of the lightning-fast AI analysis, SP can generate a price specific to an indi-vidual shopper, and display it in an instant on one of those now-ubiquitous electronic shelf price tags.
What the grocers say…
Loblaw’s spokesperson Youmna Rab told CBC, in a statement: “Surveillance pricing has created con-cerns, but it does not exist in grocery. […] If a grocery retailer appears to profit from timing, weather, demand spikes, or customer urgency, trust would erode immediately.”
An Rab added that customers’ trust is worth ‘far more’ than any temporary pricing advantage.
My take
I remember well, when the Fast Food sector announced they were go9ing to all-digital, automated, AI-enhanced ordering and fulfillment systems in he next stage of heir evolution. They called the business model ‘The Restaurant Of The Future’.
Critics immediately called out the new digital menu boards behind the counters of the major Fast Food players. They claimed those devices, when connected to computers storing information on past customer behaviour, could ‘surge’ prices up to take advantage of demand spikes.
But the Fast Food giants were quick to insist they would never do such a thing. Even if the techno-logical infrastructure to implement it was already in place for other purposes, ready to turn on at the press of a button…
That’s the precise situation the grocery giants are in now. And all it would take was for one grocery exec with a thirst for profits to give in to temptation – and push the button…
~Maggie J.