Now grocers like Safeway and Kroger are going one step further, each offering differing methods to determine individualized prices. Hoping to improve razor-thin profit margins, they are creating specific offers and prices, based on shoppers’ behaviors, that could encourage them to spend more: a bigger box of Tide and bologna if the retailer’s data suggests a shopper has a large family, for example (and expensive bologna if the data indicates the shopper is not greatly price-conscious).
The pricing model is expected to extend to other grocery chains — and over time could displace standardized price tags. Even though the use of personal shopping data might raise privacy concerns among some consumers, retailers are counting on most people accepting the trade-off if it means they get a better price for a product they want.
“If our consumer information is right, personalization is really a consumer desire right now, not so much a consumer fear,” said Michael R. Minasi, president for marketing at Safeway.
