The Realities of eTailing

Study: Shoppers Naive About ‘Customized’ Retail Pricing Online

Most American consumers don’t realize Internet merchants and even traditional retailers sometimes charge different prices to different customers for the same products, according to a new survey.

The study, “Open to Exploitation,” found nearly two-thirds of adult Internet users believed incorrectly it was illegal to charge different people different prices, a practice retailers call “price customization.” More than two-thirds of people surveyed also said they believed online travel sites are required by law to offer the lowest airline prices possible.

The study, expected to be released Wednesday by the Annenberg Public Policy Center of the University of Pennsylvania, is the latest to cast doubt on the notion of sophisticated consumers in the digital age.

The report – Open to Exploitation (press release, 17 Facts American Shoppers Need To Know — But Don’t)

From the report Overview:

The arrival of behavioral targeting and price discrimination in a severely competitive offline/online marketplace indicates that the U.S. is entering a new Way. Retailers in the twenty-first century are basing their relationships with consumers on fundamentally new assumptions and technologies. Underlying these changes are crucial issues of social fairness and marketplace transparency. A few experimental studies have shown that when researchers confront consumers with situations featuring price discrimination, the consumers reduce their trust in the retailers doing the discriminating. Until now, however, no one has asked what consumers would say if retailers justified price discrimination to consumers with arguments that sometimes they may benefit from it.

In fact, until now no one has explored what the U.S. public knows and thinks about these activities that promise to be key parts of twenty-first century marketing. How much do Americans know about who is allowed to control behavioral and other personal information about them in the online/offline marketplace? Are consumers aware of the existence of price discrimination based on behavioral targeting and other profiling? If they are aware of it, do they accept it as part of economic life, do they resent it, or do they simply believe that the government places limits on it in the interest of fairness?

Later: Online Shoppers Naive About Online Prices

Later, these two related articles – You’ve Been Scammed Again? Maybe the Problem Isn’t Your Computer; Women Are Keen to Shop Online. Merchants Are Eager to Oblige.