Since Sam’s Club is not registered, it introduces customers to an all-digital shopping experience with AI. This worries privacy advocates are worried that they can use new AI tools to unfairly target some customers with expensive items based on their shopping habits.
The all-digital approach began with the rebuilding of Sam’s Club in Grapevine, a suburb of Dallas, which was severely damaged by a tornado in 2022.
When the retailer opened two years later, it was the first time they had dumped the registers in the “scan and go” program, which allowed customers to scan each item placed in their physical cart and pay through the mobile app. The program has since been piloted at nine Dallas Metro locations and one store in Missouri, reported Retail Dive.
Instead of handing out receipts to Sam’s club employees for reviews before leaving the store, customers walk through an arch equipped with an AI-powered camera, capture images of items in their cart and electronically match items paid through the app.
Sam’s Club did not disclose when AI Technology came to its California stores, but Sam’s Club has outlets in Torrance, Fountain Valley, El Monte and Riverside.
The company said it uses data collected from the app to sort with the help of AI to personalize promotions sent to club members via the store app based on its shopping habits.
Consumer advocates have raised concerns that this type of data collection and customized advertising can be used to promote expensive products to some customers based on their shopping habits, and fall below discounted products.
Sam’s Club said it has always promoted low prices for all customers and has not used new AI technology to upsell shoppers.
What is a surveillance price?
Monitoring pricing is a practice that uses a customer’s personal information, such as location, demographics, shopping, and online browsing history, to adjust a specific price for that customer, according to the Federal Trade Commission.
This means that based on the data collected for each customer, retailers can advertise items at higher prices and adjust the products they see online.
The FTC provided examples of pharmacies except patrons for special promotions for over-the-counter medications or weight loss supplements, under the assumption that these customers are more likely to buy those products anyway. Instead, pharmacies may target these discounts to frequent buyers of these products in order to avoid losing them as customers.
Product prices typically fluctuate based on real-time supply and competition in the market. However, in surveillance pricing, according to consumer watchdog, in surveillance pricing, customers are shown on the app or website.
Retailers have collected vast amounts of customer data over decades through their loyalty rewards programs and club cards. However, the tools used to collect and analyze today’s data, including Sam’s Club’s AI cameras, are even more refined.
Monitoring pricing is just the latest way to promote and promote your customers.
The term gained infamy early this year when the Federal Trade Commission discovered that at least six companies (MasterCard, Accenture, BloomReach, Revionics, McKinsey & Co.) frequently use this practice while frequently using it, “gathering information about people’s location and demographics, leading to mouse movements on web pages.”
The federal agency found that businesses work with third-party companies to process the collected customer data and adjust prices accordingly.
According to Sara Geoghegan, Senior Advisor at the Center for Electronic Privacy Information, a huge amount of this data is collected and processed through AI-powered algorithms, segmented into different categories, including segments that segment customers into different categories.
“[Companies] We want to know the best prices we are willing to pay for our products and services.
Why is monitoring pricing potentially harmful?
“There are serious concerns about discrimination and price gouging, and this happens in black boxes that we don’t always know,” Geoghegan said. “Someone may have a higher price for something and may not understand why “the cost of things is rising,” or simply think about it. ”
A study by the FTC found that some third-party companies can “show priced products” to consumers based on “search and purchasing activities.”
For example, these companies can use such data to put their customers in a “new parent” profile and then promote “higher priced baby thermometer on the first page of search results.”
“I think surveillance pricing is a particularly creepy practice, as it’s talking about the actual dollars that consumers are spending,” Geoghegan said. “This is a practice in which businesses extract and utilize our personal information.”
Another concern is that the data collected is shared with other retailers, third-party companies, data brokers or advertisers, she said.
Does Sam’s club practice pricing for surveillance?
Warehouse Club collects data on shopping behaviors and uses AI tools to analyze habits, but not to use them. However, Ma said the warehouse club store is not practicing monitoring pricing.
Sam’s Club said there is a daily low-cost retail price strategy. This means that the products are offered at a low competitive price.
“Our merchants work tirelessly to make sure that their value is there every day and is available to all our customers and members,” MA said. “We are not a high, low or promotional retailer. [surveillance pricing] Practice has begun. ”
A high price strategy is when retailers set an early high price and then offer discounts and promotions over time.
“With millions, billions of signals being made in real time, we have decided to implement AI tools to analyze customer data. Our job is to sift through these signals and use the tools to understand the best intent,” Ma said. He and his team have done it manually before, but now they can be much faster.
How can customers protect their privacy?
According to the Federal Trade Commission, all websites and apps use a variety of technologies to track and collect information about their online habits.
This is what FTC says you can do about it:
Delete web browsing and search history, and web cookies regularly. Adjust your privacy settings to reject mobile apps and track activity on your apps and websites. For example, in the Settings app on your iPhone, look for Privacy and Security and click on the Tracking option. You can turn off the options and request your tracking. All newly downloaded apps will be automatically denied access. Download an ad blocker that prohibits advertisements from appearing in your browser.
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