Consumers curious about why their online shopping queries provide different results than their friends might not have to delve deeper than a set of experimental practices called “price steering” and “discrimination.” On their own and combined, the two practices can give online consumers very different experiences even when the same search words are used.
Price steering is a high-tech practice that delivers consumers different search results based on their past buying habits, personal tastes and sometimes the devices they use for online shopping. Discrimination provides different pricing results on the exact same items based on an individual searcher’s previous buying habits.
The two practices draw from two of the biggest trends in technology – big data analytics and personalized web browsing. As search engines become savvier at guessing user needs and retailers collect data from users who visit their websites, results can be tailored to what retailers think a particular consumer may really want and what a consumer is more likely to buy.
This data can also be used to steer consumers toward the higher end of their spending limits because data generated enables retailers to know or estimate the price points at which a consumer is likely to make a purchase.
Researchers at Northeastern University recently dove into price steering and discrimination as they relate to travel industry websites and some general merchandisers. They focused on 16 well-used websites, including Travelocity, Home Depot and Orbitz using dummy accounts to run tests. They also enlisted a group of consumers to enter scripted searches.
What researchers found was that while price steering and discrimination were occurring on some of the sites, it’s not a widespread practice. While discrepancies were found, sometimes significant ones, they were not rampant. When it does happen, however, researchers found there is little consumers can do to protect themselves.
While Northeastern researchers did uncover the use of price steering and discrimination, some retailers say there are very good business reasons behind the practice.
Orbitz, for example, noted that users who access their site from GPS-enabled mobile platforms to look for lodging are steered toward nearby hotels. In other cases, the deals offered via the site’s mobile shopping app are sometimes exclusive to those users.
The key takeaway for researchers was establishing that price steering and discrimination are indeed happening.
“Companies have a lot of personal information about you, and we do see cases where that is being used to either change prices or change the items you see,” said Cristo Wilson, the study’s co-author, said.
The key takeaway for consumers, however, might be the need to conduct searches using different platforms prior to making a final purchase.
The Boston Globe did its own search inspired by the study using Orbitz and discovered significant cost savings on the exact same room using a mobile device versus a computer. They also found the company’s mobile app generated an even lower price.
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