Attention online shoppers. On your mark, get set, search the pricing game on Your Marketplace.
Imagine this; three shoppers at the same store, at the same time, buying the same product, at the checkout.
The first shopper is charged five dollars, but the next shopper pays just three bucks, and the last one just two. No one quits using coupons or loyalty points so what’s up?
If it doesn’t seem fair, tell that to the Internet. Our shoppers are about to hit the web, to help us investigate an emerging trend in online sales.
Retailers charging different customers different prices, for the same product, all based on your personal data.
I’m Allie Minton, and I rarely shop online.
I’m Grant LeClair, I regularly shop online, and I look for the best deals.
I’m not in a rush one, and I almost only shop online.
Okay come on in everybody grab a seat welcome.
Our expert is Jesse Hirsch, attack guru, who says price discrimination is a way for online retailers to make more money.
This is about information. The more information they have on an individual, the more they can prey upon your needs, or your desires, to charge you something more, for something you really want, and maybe charge you something less, for something you’re on the fence about, as a way to persuade you to make that purchase.
So the bottom line – you could be getting charged a different price for the same product.
I want to ask you guys are you willing to kind of give up some of your personal information if it means you’re gonna get a better price maybe in some instances, but not overall is it specifically for that transaction is it for other purchases do they sell it I am a private person, and I’d like to protect my information so how do online retailers track your digital footprints what kind of shopper you are the websites you go to cookie anyone a computer cookie is a small file websites can place on your computer or smartphone it allows them to pick up certain information while you surf the web so they can target you with ads for instance I’m on Wayfair dot CA I’m gonna go shopping for new towels, and I come across these blue ones, and I like them, but I’m not ready to buy them just yet now I’m gonna go check out the latest news, and when I get here just one-way fares here too now they’re not the only ones doing this, but it’s an example of cookies in action retailers can also use this information to judge what you’re willing to pay for something all right so you’ve all brought with you a laptop you’ve also brought a cell phone, and that means you’ve also brought with you all of your online personal history so that’s good news for us today because that’s exactly what we want to test out we’re gonna have you look up hotel rooms even a couple of rental cars we want you each to look at the same city for the same dates, and the question is will you get the same price can you guys plug in, and hook up for us please on their laptops each of our shoppers opens a regular browsing window, and then another one where you’ve gone incognito that allows them to browse the web in private, and then we’ve also asked you guys to open up another regular browsing window on your cell phone because evidence suggests prices on those devices could be different first up we’re gonna go to Travelocity search for Panama City Panama November 15th checking out on November 24th all right so everybody is all set your screens are loaded on your marks get set search travel bookings are one of the biggest components of e-commerce at all your travel while he’s drift away travel giant Expedia owned several sites like Travelocity which is known for its gnome, and its promise of low rates wonder wisely as we pour over the results some other ones to share as well a marketplace survey of the habits, and attitudes of online shoppers we asked about 2000 Canadians, and found nearly half shop online at least once a month about three, and four of us compared prices before buying half of us have also booked a hotel room online right Travelocity CA its travel we’re booking back at our pricing test hotel rooms on Travelocity the first thing we notice across our nine windows is not everyone’s getting the same results what was the first one that came up for you they’re different in different browsers that’s known as steering websites displays search results in an order that’s based on what they know about you, and your spending habits you’ve got a loft Panama as your first, and what was the first one that you got in incognito so Country Inn Suites it’s significant it indicates the difference in price points of what each individual’s perceived as being able to afford so it does speak to a certain level of customization on your marks Get Set search we’re now searching for hotels in London, but so far barely a blip I got $2 off on my cell phone versus the web browser [Music] oh so you got 282 on your cellphone to 80 on incognito, and 280 on your desktop I got the difference as well, and the cellphone was $2.00 more than on the laptop our team ran a pre test of Travelocity beforehand, and found several examples of different prices for this same room in one case 144 dollars versus 150 for 181 versus $200 270 versus 278 a night imagine a week so you guys have fresh windows open we switch to a different site now what we want you to do is we want you to add a Priceline, and we’re gonna test out another city just go to Priceline they add thousands of new deals every day at the 60% off Priceline became the world’s largest online travel company with guarantees of the lowest price on everything you bought we even dated the same guy who this time we’re gonna have you search for Orlando, and you’re going over March break the best time to be in Florida right take me to Florida hit Search [Music] anything jump out at you right away so on a regular browser the Radisson Hotel in Orlando is 124 as compared to in our NATO is 198 for the same hotel big differences that’s the biggest so far that I’ve seen this time it seems to pay for grant to show his cookies, but it’s hard to know when, and where it applies for instance does it apply to car rentals on Priceline now I can ask you guys to add a car rental into this search what did you get both online or exactly the same, but grant notices something immediately a midsize rental for $61 incognito it’s just 53 bucks in his regular browser I have in the past being very focused on getting, and driving the car price down my website so I’m wondering if it knows that I’m a bargain shopper, and that’s why I’m getting the discount is he onto something Jesse absolutely I think grants past consumer behavior has very much influence they know that E Hagins they know he’s looking for a deal so they’re trying to close that deal as quickly as possible [Music] haggling is more often found at street vendors like this so this one’s $20, and can I give you 10 for it in the war between buyers, and sellers it used to be the only way to go 15 $15 that’s the lowest you can go you won’t take 10 10 no, but when the fixed price was invented a truce was called these days though the truce is over, and technology is the new weapon as we’re finding out in our test of online travel sites inflates the regular price from 567 to 572 if you think about it from a negotiating position you know the provider is actually haggling with us they’re showing us different prices, and yet we don’t have the opportunity to negotiate back, and I think that would be possible if we knew their logic if we knew what time of day was better if we knew if gender or age or geography made a difference these are factors that I think should be disclosed that’s what Canadians think – we’d like to know what’s going on on the other side of the screen 88% say online companies should be more transparent about the customer data they collect use or share maybe because only 18% believe we have control over what marketers know about us online next off Seattle – one of the world’s biggest travel companies what do you say to the Canadians including our testers who got different prices for the same thing I think that they should keep shopping around this is your marketplace the pricing game on your marketplace we’re testing online travel sites [Music] uncovering numerous examples of different prices for the same hotel room on the same site at the same time grant is getting a far greater substantial discount than Ali’s coverage could it be price discrimination our survey shows Canadians are concerned about companies offering different prices to different customers based on our online shopping habits 72% are concerned about companies tracking those habits without us knowing 66 percent don’t know how to prevent it for our final test we’re at hotels.com, and though you can’t tell from the ads it’s also owned by Expedia let’s try New Year’s Eve in New York City as we search on the results are raising suspicion oh my gosh 734 for the Belvedere Oh first of seven 12 for the Belvedere Oh so there you go you got 712 for the velvety rally, and even the original price is different so you got what is your say Ally for the original price there 918, and 896 that’s a pretty very difference New Year’s Eve in New York is clearly a price the affair many of us can’t afford, but even if you can you might want to look twice especially on your phone another one I found was the High Line hotel on the computer at 675, and at 655 showing the back same base starting price Nadya, and Ali also see a price difference for the High Line Hotel cheaper on their phones, and incognito than an irregular browser, but you have to wonder why [Music] so we booked some travel of our own, and go looking for answers in Seattle so do you make these yourself you do we want to know why there’s so many price discrepancies from one person to the next one browser to the other even on different devices what just Expedia actually mean so what it means is speed Plus encyclopedia we’re at the world headquarters for Expedia whose brands include Travelocity, and hotels calm, but 600 million people come to our sites every month Sarah Gavin is their VP of communications we’ve already shared our test results with her you guys give us enough information that we were able to completely retrace the steps for what these customers did Gavin offers a surprising explanation for the price differences uncovered by our testers they went to the hotel’s comm site first which is our us site so they got tagged as a US customer, and then in their incognito browser they went to hotels CA first so even though in the first one they went back to hotels that CA they were still a u.s. customer as far as our our site was concerned, and our hotel years were concerned so open up a new incognito window, and we’re gonna go to hotels calm now here’s what Expedia is saying when our testers opened a browser, and typed in hotels comm the actual name of the company they were taken to it’s American site alle your left window there’s the us rather than Canada there you go so it’s ca hotels comm so they clicked on this sites Canadian flag, and were taken to the Canadian site, but Expedia system still viewed our testers as American, and show them different prices though in Canadian dollars bottom line price discrimination so is this the way that the site is supposed to be working absolutely, and the in code NATO example the incognito traveler was seen as a Canadian traveler, and the other traveler was seen as a US traveler, and they’re absolutely different deals to be had so you agree then that giving different people different prices is exactly what you do we love giving great to customers, and if that means that they’re traveling internationally if that means that they’re that they’re on mobile if that means that they’re booking as a package if that means that they’re a member absolutely, and that is price discrimination our customers tell us it’s awesome it’s awesome awesome maybe, but not very transparent or in keeping with the company’s motto if the motto is the best price guarantee why does it matter if I’m shopping incognito or on a regular browser why are the prices any different at all if it’s just supposed to be the best price guaranteed if they’re not gonna be different if you’re a Canadian customer tell that to our testers who are Canadian, and got different prices, and had no idea why big difference between the incognito price tends to be higher for all the cars as for Priceline the site where we found differences in hotel, and rental car prices it says priceline.com does not ever intentionally increase prices for one customer versus another based on their browse or cash or search histories they do however lower prices when they can offer better deals so how widespread is this kind of price discrimination in the offline world like here at a movie theater seniors pay less that’s a form of price discrimination, but it’s transparent, and it’s a discount that’s available to many people online how do we even know when it’s happening I actually did all my Christmas shopping online less you did every single thing Doug Stephens warns these new ways of pricing there’s more coming the whole world is basically changing the entire world of retail everything all of the conditions that gave rise to the retail that we see around us today are completely unraveling Doug is a retail futurist, and advises some of the biggest names in the business he says personal prices make a lot of sense for retailers we step back even 20 years ago when your only choice as a retailer was to pick a price, and put it on the product right you were doing two things you were either selling too low to consumers who might have paid more for the item or you were turning consumers away who didn’t want to pay that much so retailers are always trying to get the optimal price for a product the difference is now they can now they can actually use technology to do that we show you how to gain this system plus price tracking on Amazon oh that’s crazy it’s unfair you’d feel ripped out this is your marketplace do you have a story you want us to investigate write to us marketplace at cbc.ca the real deal on your marketplace [Music] need more proof online pricing is all over the map just hop in an uber when it’s rush hour or after the bars get out suddenly a ride that normally costs $10 is now 15 Hoover calls it surge pricing, and lots of others are doing it to take Amazon for example it’s the biggest e-commerce site going 61% of people we asked shop on Amazon, but many are surprised to hear it – uses surge pricing Amazon is actually changing its prices millions of times a day across just about every item on the site that is going to be huge news to people yeah, and Amazon is doing this because they’re taking into a wide a wide variety of different considerations what what is the popularity of that item what are the seasonal factors that may be affecting the price of that item what are the competitive factors they put all of that together into these algorithms that are constantly sort of you know hashing out these different prices in fact amazon’s prices fluctuate so often it’s like a guessing game you guys want to play a guessing game with us so we thought we’d play one using this webcam so you see one of these things before oh yeah tell me how much you think that costs sixty eighty or a hundred, and twenty dollars online yeah go with eighty eighty sixty yeah so what if I made it easy for you guys it actually costs all three of those prices that doesn’t make it easier that makes it more confusing to clear up the confusion we bring out a chart from a site that tracks prices on Amazon this is actually a chart of what this webcam costs over the last year do you see how it goes up, and down like that yeah that was interesting bottoms out over here at sixty then it went up to eighty, and then the highest price hundred, and twenty dollars yeah, and then look at this this is just the last couple of weeks okay so here it was October fifteenth just sixty dollars, and then there you go in just a matter of weeks almost a 50% increase that’s crazy same webcam different price how would you feel if you were the guy who paid one hundred, and twenty bucks, and somebody else got your sixty right you’d feel ripped off prices have always been a mystery, but who really knows what something should cost, but it’s even more so with things like dynamic pricing, and price discrimination so here are some tips on gaming a system that’s trying to game you go incognito look at products using a private browsing window to see if the price is higher or lower in that mode free of your history or you can also delete your third-party cookies if you want to see prices unaltered by your history along with fewer targeted ads use price tracking tools to watch prices, and get alerts when prices drop as for our testers they have their own take away it’s not fair that our spending habits our buying habits are being tracked your only one-way bartering, and that is kind of unfair being able to set the parameters of what they can see then at least you’ve got some control back in your hands I need to be a bit more diligent in using different platforms technology to really find the best price especially when prices might cost you your privacy travel nightmares they got delayed about three times before they decide to cancel the place sluggish customer service hell what are your flight rights they didn’t seem to care at all we’re chasing the people with power if an airline isn’t find when they break the rules then why should they follow the rules?