You’ve certainly been asked (begged!) to join up for at least one loyalty “points” program - like PC Optimum, Aeroplan, or Hilton Honors - over the years.
The piece raises fair concerns about data use and potential price discrimination in grocery loyalty programs. That said, evidence for widespread surveillance pricing in Canada remains mostly anecdotal. The Competition Bureau's 2023 grocery report found concentration drives higher profits, but didn't identify loyalty schemes as a key factor in reduced competition or inflated food costs. Unredeemed points do represent a consumer transfer to retailers, though. Opting out where possible might help, but it's tough in an oligopoly.
That's true. I have no idea how widespread it is right now. And it's possible that the Consumer Reports study identified early experiments (that's apparently what the retailers in the U.S. claimed). But I'm also pretty confident that the analysts guiding the large retailers would never recommend spending billions of dollars each year while just leaving cash on the table. If they're able to squeeze more money out of their systems, it's highly unlikely that they won't.
As I noted in another comment here, I've definitely seen online price discrimination here in Canada on online retailers like Amazon (and others).
"But the nasty bit here is that there’s growing evidence that retailers are using surveillance pricing in grocery stores for basic food items." I don't see how this would work. I go into the grocery store and look at the prices on the shelves. Those don't change by customer; they can't; they are printed. So then I go to the cash and pay with my credit card. Whatever linkage it may have does not affect the price I pay, which, in the rare case that it does not agree with the shelf price, I complain.
I had the same question. In fact, it's actually worse: hiking the cash register price over the shelf sticker price would be criminal fraud. I was planning to dive deeper into that Consumer Reports study to try to figure it out. But perhaps it's connected to the growing use of digital shelf pricing (I've seen those already in Best Buy), or even "accidentally" missing shelf prices.
Of course, it might work the other way. My wife sometimes tells me how the cash register price comes out lower than the shelf price. Maybe the goal is that the right customers will notice and appreciate those events and will be more likely to establish brand loyalty.
Amazon always shows me different prices if I use my VPN service to virtually move myself to another part of the country. Makes sense to squeeze every last cent out of the customer, I guess. Though with food it gets ethically muddy.
I've seen that, too. I've especially wondered how that works with their Prime membership - which is harder to test with a VPN. After all, as a member, I've already got a strong relationship with them. Sure, I'm saving on shipping, but are they making it up with product pricing?
Quite possibly. I suspect they use an algorithm with a thousand variables including demand elasticity and marginal rate of substitution to predict the impact of an n% price adjustment.
I always enjoy watching my wife's confusion when we get wildly different prices for Amazon items despite the fact that both of our devices are using the same public IP address.
The piece raises fair concerns about data use and potential price discrimination in grocery loyalty programs. That said, evidence for widespread surveillance pricing in Canada remains mostly anecdotal. The Competition Bureau's 2023 grocery report found concentration drives higher profits, but didn't identify loyalty schemes as a key factor in reduced competition or inflated food costs. Unredeemed points do represent a consumer transfer to retailers, though. Opting out where possible might help, but it's tough in an oligopoly.
That's true. I have no idea how widespread it is right now. And it's possible that the Consumer Reports study identified early experiments (that's apparently what the retailers in the U.S. claimed). But I'm also pretty confident that the analysts guiding the large retailers would never recommend spending billions of dollars each year while just leaving cash on the table. If they're able to squeeze more money out of their systems, it's highly unlikely that they won't.
As I noted in another comment here, I've definitely seen online price discrimination here in Canada on online retailers like Amazon (and others).
Interesting analysis of McDonald's pricing across the GTA: https://www.reddit.com/r/toronto/s/uPTVhxMTBG
"But the nasty bit here is that there’s growing evidence that retailers are using surveillance pricing in grocery stores for basic food items." I don't see how this would work. I go into the grocery store and look at the prices on the shelves. Those don't change by customer; they can't; they are printed. So then I go to the cash and pay with my credit card. Whatever linkage it may have does not affect the price I pay, which, in the rare case that it does not agree with the shelf price, I complain.
I had the same question. In fact, it's actually worse: hiking the cash register price over the shelf sticker price would be criminal fraud. I was planning to dive deeper into that Consumer Reports study to try to figure it out. But perhaps it's connected to the growing use of digital shelf pricing (I've seen those already in Best Buy), or even "accidentally" missing shelf prices.
Of course, it might work the other way. My wife sometimes tells me how the cash register price comes out lower than the shelf price. Maybe the goal is that the right customers will notice and appreciate those events and will be more likely to establish brand loyalty.
I also regularly have to argue for the points I am due. It's increasingly not worth it.
Interesting. I wouldn't be surprised if that kind of friction was built into the business plan itself.
Amazon always shows me different prices if I use my VPN service to virtually move myself to another part of the country. Makes sense to squeeze every last cent out of the customer, I guess. Though with food it gets ethically muddy.
I've seen that, too. I've especially wondered how that works with their Prime membership - which is harder to test with a VPN. After all, as a member, I've already got a strong relationship with them. Sure, I'm saving on shipping, but are they making it up with product pricing?
Quite possibly. I suspect they use an algorithm with a thousand variables including demand elasticity and marginal rate of substitution to predict the impact of an n% price adjustment.
I always enjoy watching my wife's confusion when we get wildly different prices for Amazon items despite the fact that both of our devices are using the same public IP address.