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Pocketmags Digital Magazines
Pocketmags Digital Magazines

Pricing gets personal

Big Data means retailers can figure out exactly what you’re willing to pay— and they’re starting to charge it

The future of Shopping

I magine strolling with a neighbour to the corner shop, only to be charged 50p more than her for buying the same box of cornflakes. You’d better get used to that feeling of unfairness because “price discrimination” could be a big part of the future of retail. In fact, it’s already here. On some websites, online prices now bounce up and down in ways that are specific to you—depending on what you’ve bought before, what you paid for it, and even what you’ve previously browsed and not bought. Big data, the cascade of digital traces we all leave in the networked age, allows firms to gather information on customers, and they can use that information to figure out, with unprecedented accuracy, how much we’re each willing to pay—and, therefore, the maximum they can charge.

Put like this, price discrimination sounds unappealing, and there’s no doubt it offends the expectations we’ve developed in the mass consumer markets of the last 70 years. We’ve grown used to prices not varying for the simple reason that companies haven’t known the maximum their customers were willing to pay—their so-called “reserve price.”

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About Prospect Magazine

In Prospect’s January 2018 issue: Five writers attempt to plot the impending advances in shopping, politics, sex, food and computing through 2018. James Plunkett looks at shopping and explains how personalised prices will hand even more power to the big companies; Theo Bertram outlines why political volatility is here to stay and what it means for us; Kate Devlin argues that sex robots are only a part of the impending sexual revolution; Stephanie Boland outlines why we’ll all end up eating lab grown food; and Jay Elwes explains the next steps in our computing quantum leap. Elsewhere in the issue: Dani Rodrik uncovers the truth behind the great globalisation lie—there were always going to be losers, Iona Craig delves into the war in Yemen—the world’s worst humanitarian disaster, Chris Tilbury explains why Britain urgently needs a plan for its failing prisons