As personalized pricing practices are being called into question online and in stores, and electronic shelf labels (ESL) are being scrutinized, Walmart president and CEO John Furner has issued a letter promising the company will not use personalized pricing as it continues rolling out electronic shelf labels across its stores.
The Furner letter, addressed to Walmart customers and loyalty program members, stated that everyday low prices have been Walmart’s policy for more than 50 years. The company has made low, consistent prices a priority even as market shifts affect Walmart costs and what it charges for goods.
In the letter, Furner maintained:
Prices can change. We lower them when we can pass savings along. Sometimes they rise because an item costs more to buy or transport. But using someone’s income, shopping history or moment of need to charge them more would violate the EDLP promise our business model is built on. We won’t do it. You are at the heart of our why and our relationship with you has always been built on trust. For decades, our associates have built that trust, one interaction at a time. So, as technology improves, we’re putting the same attention on trust and serving you as we do when you walk into our stores and clubs.
I’ve heard concerns about companies using that information and technology to charge you more.
I want to tell you where we stand: We price the product, not the person.
Many of you have seen the digital shelf labels in our stores and some have asked why we have them. A shelf price should match what rings up at checkout. Digital shelf labels help us do that more consistently by displaying the right price. They also save associates time replacing paper tags. It may sound like an easy task, but as someone who has had to change those paper tags by hand over the years, I can tell you it’s a time-consuming and unrewarding task. Our associates would much rather be helping you, our customers.
AI has added incredible new ways for us to serve our customers and members, and it rightfully also raises questions about the information it has access to. Understanding our customers and members is what makes us special and allows us to better serve them. For years, that has taken place in our stores and clubs as we help each customer with their individual needs. We want to offer that same level of personalized care when our customers shop online with Sparky, our AI shopping assistant. When you engage with Sparky, that’s an invitation to serve you better, not to use your personal information to set a personalized price. We’ve never used the relationships our associates have with customers to charge more, and we won’t do that with AI.
Furner said Walmart has committed to specific approaches to pricing that support its proposition to consumers based on maintaining everyday low prices, including:
- Walmart won’t set different prices based on who you are or the time of day. Consumer income, shopping history, urgency or what Walmart consumers might pay won’t change prices.
- Walmart will hold its use of shopping tools to the consistency promise. The company won’t use the information shared with its Sparky AI agent, or otherwise, to raise a customer’s price or hide lower-priced options.
- Walmart will continue to use shopper information responsibly and respect consumer choices. Customers can decide whether to share details about their habits and preferences to get more personalized offers from Walmart, with clear disclosure about how the company uses the information, how it protects it and how it respects the choices shoppers make.
Furner added that Walmart employees would continue to oversee pricing and that the company would monitor and test technology against its outlined commitments. He added that technology will change over time, but that Walmart would live up to its commitments to earn consumer trust and help shoppers save money.
New Jersey enacted the law dubbed the Fair Price Protection Act to protect Garden State shoppers from discriminatory surveillance pricing, according to a statement issued by Governor Mikie Sherrill. The legislation prohibits businesses from using personal information, including online activity, location, purchasing history or other collected data, to charge different prices for identical products based on what an algorithm predicts a shopper is willing or able to pay.
However, the act is limited in intent and scope. It prohibits retailers from using personal data to set individualized prices on groceries and other necessities for New Jersey shoppers but, the statement points out, doesn’t ban loyalty programs or discounts. Amid concerns about the potential use of electronic shelf labels for surveillance pricing, the law also imposes a one-year moratorium on new ESL use while the New Jersey Innovation Authority studies the technology’s effects and impact. However, the law doesn’t require stores to stop using, repairing, or replacing electronic shelf labels already in place.
In her comments on the legislation, Sherrill noted, “New Jersey families are already feeling the pressure of higher costs. The last thing they need is companies secretly using their personal data to charge them more than someone else for the exact same product. If businesses want to compete, they should do so by offering better prices, not by finding new ways to squeeze shoppers. This law puts New Jersey shoppers first by protecting their privacy and ensuring fairness in pricing.”
