Researchers argue in a recent study that many retailers, including Home Depot, use histories of online shoppers’ activity not only to customize movie recommendations or product suggestions on websites, but also to set individual prices for items.
Retailers use data collected online to offer prices selectively on products searched for in online search engines, hiking up prices for some shoppers and dropping them for others, according to a study from Northeastern University in Boston.
Of the online stores studied, Home Depot’s website had the most incidents of offering online shoppers lower prices if customers didn’t have browser histories, the study says.
Few of the websites showed price inconsistencies for products searched for online, but Home Depot’s site was among the online stores with the most frequent discrepancies, often with price differences of $100 or more. The study also included websites for Walmart, CDW, Best Buy, JCPenney, Macy’s, Newegg, Office Depot, Staples and Sears.
For the study, researchers excluded retailers that host a variety of merchants, as Amazon does, and companies that sell only their own brand.
“[P]rice discrimination isn’t an inherently sinister ploy to take advantage of people,” but is a common practice seen at brick-and-mortar stores with paper coupons and senior citizen discounts, says Northeastern researcher, Christo Wilson, in an article.
But those practices at the traditional stores are transparent, while online customers can’t know if they’re getting a markup or the best price, Wilson says.
“I get this question from people all the time: ‘How do I get the best price?’ The truth is I don’t have a good answer,” Wilson says in the article. “It changes depending on the site, and the algorithms they use change regularly. Good advice today might not be good advice tomorrow. The point is that as a consumer, you’re at a disadvantage unless it’s transparent.”
To view the study, which also looked at prices charged by hotel and rental car websites, click here.