Unlock Editor’s Digest for free
Roula Khalaf, editor-in-chief of the FT, selects her favorite stories in this weekly newsletter.
Walmart has issued a rare public letter promising not to use personal data to fix customer prices, as the U.S. retail sector faces growing suspicion of new technology at a time of persistent inflation.
John Furner, the chief executive, wrote Friday that America’s largest retailer would not use its internal AI shopping assistant found in the store’s app or the electronic tags that are proliferating across its 4,600 stores to change product prices based on the identity of the shopper.
“We don’t set different prices based on who you are or what time of day it is, and we won’t,” he said. “Your income, your purchase history, urgency or what we think you might pay won’t change the price. And whether you’re buying groceries or electronics on a hot afternoon or are suddenly in a hurry for an item, that’s never a reason to charge you more.”
The idea that prices fluctuate due to a consumer’s unique personal characteristics would have been unimaginable until recently. Walmart has long embraced the principle of “everyday low prices” rather than changing them through temporary sales and promotions.
But the advent of e-commerce, now powered by AI, has given retailers the ability to track customer purchases and online behavior, raising concerns about so-called personalized pricing.
Walmart received two patents earlier this year that would give machine learning and other automated processes more influence over pricing, the FT reported. One patent envisioned a “demand forecasting and price recommendation” tool that would integrate sources such as purchases, prices, payment methods and customer identification, such as a passport or driver’s license number.
Furner’s letter was released the day public comments were expected on a new enforcement policy proposed by the U.S. Federal Trade Commission that warned companies that fail to inform consumers about how their personal data is used to set a price could be breaking the law.
Concerns about retail pricing practices have also drawn bipartisan attention in Washington as politicians respond to voters’ anger over inflation.
In August, Republican Senator Josh Hawley held a hearing in which he criticized “the partnership between the AI industry and some of America’s largest companies to effectively scam consumers out of every last dollar they have in order to buy the products they need and rely on.”
Frank Pallone, the top Democrat on the House Energy and Commerce Committee, sent letters to 25 companies, including Walmart, seeking details about their pricing practices.
Politicians have sought to link concerns about online price manipulation to the advent of electronic labels on store shelves. Retailers say the labels save labor hours spent changing paper labels, but critics, including grocery store workers’ unions, object.
Walmart reiterated label sellers’ claims that they do not contain cameras, microphones or facial recognition.
“All customers see the same price. The price on the label is the same for all customers, regardless of the weather, time of day or who is standing in front of the shelf,” the company said in a statement released along with Furner’s letter.
Gn bussni
