Why AI could end the price tag as we know it

The price tag, once a steadfast indicator of value for consumers, faces potential obsolescence due to artificial intelligence, warn experts. Lindsay Owens, CEO of the Groundwork Collaborative, a nonprofit think tank focused on economic policy, contends AI could disrupt the universal pricing norms established since the 1860s when John Wanamaker introduced fixed prices in his Philadelphia store.

Dynamic pricing, which companies have employed for years to adjust prices based on supply and demand, weather, time, and other factors, is set to evolve with AI, allowing retailers to charge different prices to different individuals based on their personal data. This "personalized" or "surveillance" pricing, powered by AI's ability to analyze vast consumer data, could lead to more granular, dynamic, and individualized pricing, potentially resulting in AI-enabled haggling where consumers face fluctuating prices based on factors largely unseen.

In a recent trial, Instacart demonstrated how AI could set different prices for the same goods from the same store, leading to price variations of up to 23% among customers. Despite these findings, Instacart denies using consumers' personal data, including protected characteristics like race or gender, to set prices, and has stated it will cease the practice.

Walmart, another retailer experimenting with AI-powered pricing, denies using customers' personal information or shopping history to adjust prices, emphasizing its commitment to fixed prices. However, as AI continues to advance, the days of static prices may soon be behind us.