Walmart chief rules out personalised pricing as AI transforms retail

Walmart issued a rare public letter promising not to use personal data to set prices for customers, as the US retail industry confronts rising suspicions over new technologies at a time of persistent inflation.

John Furner, chief executive, on Friday wrote the largest US retailer will not use its in-house AI shopping assistant found inside the store's app or the electronic shelf labels multiplying across its 4,600 stores to change product prices based on a shopper's identity.

"We don't set different prices based on who you are or the time of day, and we won't," he said. "Your income, shopping history, urgency or what we think you could pay won't change the price. And whether you're buying groceries or electronics on a hot afternoon or in a sudden rush for an item, it's never a reason to charge you more."

The idea of prices fluctuating because of a consumer's unique personal characteristics would have been unimaginable until recently. Walmart has long embraced a tenet of "everyday low prices" rather than changing them through temporary sales and promotions.

But the advent of ecommerce, now supercharged by AI, has given retailers the ability to track customer purchases and online behaviour, giving rise to concerns about so-called personalised pricing.

Walmart earlier this year received two patents that would give machine learning and other automated processes more sway over prices, the FT reported. One patent envisaged a "demand forecasting and price recommendation" tool that would incorporate sources including purchases, prices, methods of payment and customer identification, such as a passport or driver's licence number.

Furner's letter was posted the day public comments were due on a new enforcement policy proposed by the US Federal Trade Commission, which warned businesses that fail to inform consumers how their personal data is being used to set a price may be breaking the law.

Concerns about retail pricing practices have also attracted bipartisan attention in Washington as politicians respond to constituents' anger over inflation.

In August, Republican senator Josh Hawley held a hearing in which he excoriated "the partnership between the AI industry and some of the biggest corporations in America to effectively scam consumers out of every last dollar they have in order to buy products that they need and rely on".

Frank Pallone, the top Democrat on the House energy and commerce committee, has sent letters to 25 companies including Walmart seeking details on their pricing practices.

Politicians have sought to tie concerns about online price manipulation to the advent of electronic shelf labels in stores. Retailers say the labels replace labour hours spent changing paper labels, but critics including grocery workers' unions are opposed to them.

Walmart reiterated label vendors' statements that they do not contain cameras, microphones or facial recognition.

"All customers see the same price. The price on the label is the same for all customers, no matter the weather, the time of day, or who's standing in front of the shelf," the company said in a statement issued alongside Furner's letter.