With online shopping becoming the more popular alternative every day, some big name companies are trying to find a way to compete. These companies are now using computer driven "artificial intelligence" to collect data, and figure out what to charge their customers.
Jonathan Volzke, a frequent online shopper, says that the draw of online shopping isn't only in the cheaper prices, but the variety too. "I can go to one site and see 10, 15, 20 of the same product at a different price point, and I can generally find exactly what I want."
By using the AI software, the computers are able to adapt to changes in supply and demand, which in turn updates prices in real time.
One expert, Gary Liu from Boomerang Commerce predicts all businesses will use this intelligence in the future. "It's not a question of if, but more a question of when."
Attorney Maurice Stucke, a co-author of two books on data and algorithm pricing says "we're going from a world where people use to stamp the price on the product itself to a world where you're buying goods and services online or even offline, but a pricing algorithm now determines it."
Experts predict it will be the pricing process more businesses use in the future. “It's not a question of if, but more a question of when,” says Gary Liu from Boomerang Commerce.
Boomerang makes AI enabled software and says it creates a more competitive market. “By having more and more retailers that are using this technology, the retailers are able to update prices at scale, in a timely, relevant way and more competition typically means consumers win in the long run,” says Liu.
Stucke is watching AI pricing algorithms with caution, concerned that we won't necessarily know when we get the best deal. He says, “We can't assume that the market forces by themselves will necessarily get us the right price.”
An international economic council is meeting to discuss competitive “challenges raised by algorithms.”
The FTC is also watching this issue.
Jonathan says he will continue to bargain hunt but would like to know that the prices he compares are the lowest of the low: “I was surprised to find out that the price is derived through some complicated formula versus just the cost of the product, the cost of stocking it, the cost of mailing it.”
Experts say your best bet to find the best deal is to do your homework, comparing online as well as in-store….and, of course, don’t forget those price comparison apps!