It’s Not Your Imagination: Online Stores Do Change Prices
You get the same sneaking suspicion every time you book a hotel or rent a car online: With each search, it seems the prices change, and you can’t help but wonder if sites are changing prices for you in particular.
Well, they are—at least in some ways.
A team of researchers at Northeastern University recently analyzed how e-commerce sites tailor prices to specific shoppers based on their digital habits and demographics, such as their ZIP code. According to the study, presented last week at the Internet Measurement Conference in Vancouver, British Columbia, major e-commerce sites including Home Depot, Walmart, and Hotels.com list online prices that are all over the map, and in some cases, these prices are “personalized” to the behavior of particular shoppers, including whether they shop on a phone or on a desktop.
“Going into this, we assumed the project would be risky—that we might not find anything,” says Christo Wilson, an assistant professor of computer science at Northeastern and one of the study’s authors. “There have been incidents in the past where companies have been caught doing this, and the PR was very bad. We thought that sites wouldn’t be doing anything. We were more surprised that we found something.”
According to some companies whose sites were analyzed by the study, its methodology was flawed—and the researchers have admitted to one mistake in the way they handled things. But the study still provides a window into how your shopping experience can change depending how you behave.
The researchers recruited 300 people through the crowdsourcing site Mechanical Turk and had them perform product searches on 16 top e-commerce sites. Specifically, the study tested for personalization based on browser (Chrome, IE, Firefox, Safari), operating system (Windows, OS X, iOS, Android), and whether or not a user was logged into his or her online account.
As each person ran the searches—with long browsing histories attached to identifying “cookies” on their machines—an automatic, cookie-less simulated browser ran the same searches at exactly the same time. This, says Wilson, ensured that price differences couldn’t be chalked up to “noise” or variations in timing that might reflect an inventory change or other quirk of the system.
If you shop using your smartphone, the study claims, some e-commerce sites pay attention to what kind of phone you use. Home Depot and Travelocity—whose sites were targeted by the study—deny that they do this, and Travelocity pointed out a flaw in the study’s methodology, which the researchers have since admitted to.
But Travelocity did acknowledge that there are often a handful of mobile-only offerings on smartphones and tablets that don’t show on desktop search results. The tactic is used as incentive for users to download the mobile app. Results aren’t cheaper by design, a company representative tells Wired, but they sometimes are, since Travelocity smartphone users might be looking for a place to stay last-minute.
These results appear to bring down the average price for mobile results, the representative explains. But the company claims the pricing for the same specific properties remain constant across platforms.
Cookies Aren’t Always Bad
There were also times when Wilson and his fellow researchers were able to see other forms of price discrimination on some websites but were unable to get to the root cause of that price variation—notably, on Sears and rental car websites. “We tried different browsers and different platforms. We tried logging in and logging out,” Wilson says. “But it looks like there’s something else in there that we haven’t figured out yet.”
The researchers also say that cookies aren’t always a bad thing. Wilson explains that on sites like Cheaptickets or Orbitz, users who are logged in will often see “members only” prices that can save them an average of $12 on hotels. But if buyers cleared their cookies before conducting the search, they wouldn’t be logged in and wouldn’t see that discount.
One conscious decision Wilson and his colleagues made while executing the research was to avoid Amazon and eBay. Both those venues are online marketplaces, Wilson explains, and sellers putting up their own products—plus used items getting listed on the site—made things too complicated.
The Race to the Bottom
So how do you get the best offer for your money? There’s no one-size-fits-all solution, according to Wilson. “Every site we looked at was doing something different—changing different things based on different information,” he says.
The best advice he can offer is to run searches on all platforms you have access to, if you’re willing to put in the time. That means your regular browser, an incognito browser, and your smartphone or tablet. Then, if you want to be extra thorough, ask a friend or relative in a different ZIP code to do the same thing and see what results turn up.
This tedious shopping is a far cry from the familiar system of clearly marked prices and coupons at brick-and-mortar stores, but it’s all part of digital-age living. We have no choice but to get used to it. “All online retailers are watching each other, and it’s a race to the bottom,” says Wilson. “The only thing that changes between online stores and brick-and-mortar stores is the pace at which that happens. It’s faster online.”
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