Target has been tracking its app users’ locations and changing the prices of goods depending on where the shoppers are.
Target uses what is known as “dynamic pricing.” This practice is when retailers change their prices based on the time of day, the location, or the demand. The procedure helps major retailers like Target compete with other large companies such as Amazon that changes their prices nearly every 10 minutes. Amazon is even known to adjust prices or offer additional promotions in the timeframe between customers placing an item in their cart and purchasing it.
Target customers who aren’t aware of “dynamic pricing” or how it works may find themselves paying more for goods based on where they are physically located at the time. An investigation conducted by NBC Minneapolis affiliate KARE11 news in 2019 revealed that Target changed its prices based on whether mobile app users were shopping from in or outside one of their stores. When the station compared the prices of 10 different items, the total bill was $262 less than when shopping from the back of the parking lot versus inside the store. The mobile app asks for the user’s location, which most will hand over without giving it much thought.
George John, who works as a professor with the University of Minnesota Carlson School of Management Marketing, told KARE11 that the issue boiled down to an algorithm.
“Somebody at Target programmed in an algorithm which says someone who is 50 feet within the store is willing to pay more. The most reasonable explanation is that you just revealed your commitment to buying the product; you’re in the store or the parking lot. If you are further away, you haven’t quite committed, so I’m going to give you a juicier deal.”
A spokesperson for Target explained that the prices are based on the different markets.
“For online orders that are fulfilled by our stores, prices reflect the local market,” a spokesperson explained to HuffPost. “As always, we also offer guests the ability to price match through our Price Match Guarantee, providing added assurance they’re paying the lower price.”
This means that Target will adjust its prices based on various local economic circumstances. Even if you are shopping online, you may pay different fees depending on where the merchandise is shipping from.
While this may be surprising news, Target’s cult-like following will likely never stray from the retailer giant.