How much does a carton of eggs cost? Depends on who you are. A new study produced in collaboration with policy group Groundwork Collaborative, Consumer Reports, and More Perfect Union found that people who purchased the exact same product from the exact same store at the exact same time were charged different prices—sometimes up to nearly 25% more—when placing the order on Instacart.
The study tapped 437 volunteer shoppers in four cities who were put in groups that were synced up virtually to add items from a specific grocery store into their Instacart shopping carts at the same time. They then reported the prices that appeared for those researchers to determine if people were being charged different prices for the same goods.
The result was a pretty resounding “Yes.” According to the study, nearly three-quarters of all grocery items tested in the experiment produced multiple prices across shoppers, including some products that showed five different prices for the same product.
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Researchers reported that the final total of the Instacart shopping carts varied by an average of 7% despite every item and condition being identical.
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According to Consumer Reports, the company confirmed the study accurately reflected its pricing strategies, which it claims to only do at 10 partnering grocery retailers that it chose not to name.
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While Instacart didn’t name the retailers they have partnered with for this program, the study did name where they performed their tests. One retailer was Target, and they found varying prices on items sold through Instacart from the retailer. Target told Groundwork Collaborative that it has no business relationship with Instacart and “does not directly share any pricing information with Instacart or dictate what Instacart prices appear on their platform.” Instacart acknowledged to the publication that it scrapes Target’s prices and adds an upcharge to offset “operating and technology costs.” So Target was seemingly not one of the 10 retail partners, but shoppers there were still exposed to price variance. Instacart claims it has ended pricing experiments at Target.
It certainly seems like the pricing discrepancies are an example of surveillance pricing, where consumers are served different prices based on information the platform knows about them. The study didn’t find any clear correlation that would link certain shopper demographic data and the prices they were presented, and Instacart told Consumer Reports that it doesn’t use any personal or demographic data from users in its pricing experiments and instead explained that customers are randomly assigned to price groups.
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“These tests are not dynamic pricing – prices never change in real-time, including in response to supply and demand. The tests are never based on personal or behavioral characteristics — they are completely randomized,” an Instacart spokesperson told Gizmodo.
So Instacart’s varied pricing is allegedly part of an experiment that randomly assigns shoppers to different pricing groups, but brands whose goods are available on Instacart can use the company’s data-driven pricing platform to serve different prices based on different demographic data. For the end user, that likely feels like a distinction without a difference, as they are ultimately seeing different prices based on conditions that are outside of their control.
Source: Instacart Charging Customers Different Prices for Same Products, Study Finds
Robin Edgar
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