Is AI making you pay more? The growing controversy over personalized pricing

I wanna talk about something, well, that you all need to be aware of. You might call it digital pricing. Here's a little video that I'm gonna play out while I explain what's going on here. So recently, there's been a lot of talk about AI technology charging shoppers different prices for the same products. In fact, there's a Wall Street Journal report that found that one Walmart shopper who was looking at a hard drive that was listed around $110 less than what was appearing on his wife's phone. Walmart says that was an error. But then there's other stores, McDonald's, even Kroger, kind of facing similar claims, which they deny. And according to a new Reuters article, McDonald's is actually using AI to figure out what the optimal price is at each restaurant. That means you can find a Big Mac at one store selling for five bucks and go down about a mile or two, And it might be a dollar or more. So now some states are even restricting data-driven pricing. Now, is this smart business or unfair to customers? Well, I thought I'd bring in an expert to break down how to handle this all. We have Natalie Beckerman, a customer experience expert, author as well of When Did You Stop Caring? Natalie, good to have you join us. You know, this is a pretty interesting conversation because there are two McDonald's. They were about two miles apart, charging different prices for the exact same burger. I want to ask you, is this smart business or is this customers being taken advantage of? Well, when you have two nearby restaurants that charge different prices, you know, for the same burger, customers aren't necessarily seeing the pricing model, right? They see a receipt. They ask whether they're being treated fairly. And then the trust conversation begins. Well, and, you know, I have to include, too, a little important distinction here. McDonald's disputes this characterization. They say that AI sets its own menu prices, which I see that as well. But at the same time, I mean, the trust, I feel like, is already, well, on the table. Yeah, I think what companies don't necessarily realize is that AI can absolutely help make businesses, you know, maybe have smarter pricing decisions, but we're measuring customers' willingness to pay, and we should really be looking at whether these customers want to return or their trust is there. And so what I always say is that AI can also scale bad decisions, you know, just because the technology tells the customer or tells what the customer might be willing to pay doesn't mean they want to pay that. And, you know, to two local venues with very different pricing creates a real loyalty and trust risk. Well, you know, we've even heard of Walmart with dynamic pricing, changing the price tag in the aisles. with that being said is this are we going to see a lot more of this i i think we are um obviously you know you mentioned my book and that's why i wrote the book because i'm like we have to pay attention to not just the efficiency and the productivity but also the customer experience and i think you know customers are gonna forgive a higher price unless they feel that they're being tricked. So again, I repeat, just because you can charge more, you shouldn't charge more. Customers don't want to be manipulated. And dynamic pricing has been around forever, but it's how we use dynamic pricing. If we're using it appropriately to measure the right things for the customer, then it might be a good thing. But if you're ultimately putting trust and loyalty at risk, it's not such a great thing. I mean, and I have to be honest, even with booking flights. I've cleared my history just to see if the price has changed. I've logged on to other phones and they did. So I feel like this has been around already. I think we're just maybe adapting to it or maybe not, maybe lack of. Well, I think customers are used to it, but they don't necessarily understand it. And my ask and my urge of companies are to help customers get educated, help their employees get educated on why dynamic pricing or why smart pricing. They are very different. And also, in terms of pricing, the machine learning is trying to predict what customers are going to pay, but the AI pricing is how businesses use those decisions to make pricing decisions. And if you don't understand a pricing decision as the consumer, you feel you're being taken advantage of. And looking at it from a company's perspective, how do brands use AI without really making people feel like they're not being treated equally? Yeah, I mean, there's lots of positivity about automation and AI. I do want to say that, but I think, again, it is about using it the right way. If you use it the wrong way, you're going to scale bad decisions and indifference. And, you know, we need to take things into consideration with customers about what they're feeling, about how much they want to come back, how much they appreciate the brand, how loyal they are to the brand. And so I think we need to get a little smarter or businesses need to get a little smarter and take some of those softer measures and actually use those as well. Natalie, I know you wrote the book, when did you stop caring? What other things can we learn that are inside the book that could help us really in our everyday lives? Yeah, look, I'll flash this up here because I'm very passionate about it. But but, you know, you know, I wrote this book because we've become obsessed with optimizing revenue. We've become obsessed with reducing costs and gaining productivity. And so what I want, you know, consumers to do and to understand is they have choices and they have choices on how they should be treated and where they shop. And businesses need to realize that and remember that. And the pricing debate is not going to go away, but we're measuring the trust and the loss. And companies need to get smarter and realize that consumers do have a choice. And so I challenge consumers to challenge companies. I ask them not to challenge the frontline staff, but I ask them to challenge the businesses. Certainly great advice, Dr. Beckerman. Uh, and Natalie, sorry. Uh, we appreciate you so much for joining us here on Fox two Detroit. Uh, and we certainly want you back for a lot more on customer experiences and I'm sure there's a lot more we need to break down. How can people find you and follow you? Yeah. Reach out to me at nataliebeckerman.com and I'd be happy to talk to anyone. And how can people get the book? Is it on the website too ah the book is on any um and yes it's on the website and it's anywhere that books are sold awesome and it's uh when did you stop caring i feel like my my my co my co-anchor says well the price of the book changed due to dynamic pricing it's funny because it is on amazon and it is being changed daily it is on amazon it is being changed daily oh natalie it is so good to have you join us and we certainly welcome you back we appreciate you