Walmart Wins Patents To Give Algorithms More Sway Over Prices (ft.com)
- Reference: 0181040108
- News link: https://yro.slashdot.org/story/26/03/19/0430224/walmart-wins-patents-to-give-algorithms-more-sway-over-prices
- Source link: https://www.ft.com/content/8c2338dc-9e2e-4561-955a-c2a6a6c4d28e?syn-25a6b1a6=1
> In January Walmart obtained a U.S. patent for a "system and method for dynamically and automatically updating item prices" to carry out markdowns in its ecommerce unit, a rapidly growing division that generated more than $150 billion in sales last year. Last week it received another patent for using machine learning to predict demand and recommend prices for goods. [...] Walmart said that both patents were "unrelated to dynamic pricing," as the patent issued in January was specific to markdowns and last week's patent was designed for merchant teams to make decisions, not the technology.
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> The patent granted in January involves an "end-to-end price markdown system" for ecommerce platforms such as Walmart.com based on data including predicted demand and consumers' price sensitivity. Last week's approved patent outlines ways to forecast demand and set prices at levels that will move stock over periods such as a week, a month or a quarter. "Example categories may include, for example, a food item, outdoor equipment, clothing, housewares, toys, workout equipment, vegetables, spices," according to the filing. The "demand forecasting and price recommendation" tool envisaged in the patent would incorporate sources including purchases, prices, methods of payment and customer ID, such as a passport or driver's license number.
"Dynamic pricing or anything that smells like it is playing with fire," said Matt Hamory, a grocery industry consultant at AlixPartners, who cited "the goodwill that you can lose by getting customers to think or suspect or worry even slightly that you are doing things with pricing that are to your benefit and their detriment."
[1] https://www.ft.com/content/8c2338dc-9e2e-4561-955a-c2a6a6c4d28e?syn-25a6b1a6=1
Seems like the same old price fixing & gouging (Score:2)
People have been using algorithms to manage inventory and pricing for over a century, starting with simple formulas like Economic Order Quantity that tried to balance stock levels and costs. By the mid-1900s, computers brought operations research into the mix, letting businesses forecast demand and optimize inventory more systematically. Then came barcodes and databases in the 80s and 90s, giving retailers near real-time visibility. Fast forward to the 2000s, and companies like Amazon pushed things further
Re: (Score:2)
More concerning is these transnational corporations developing thier own crypto
Walmart is exploring the possibility of introducing a “virtual currency for use by members of an online communityin the field of NFTs”
The retail giant is also looking at providing a means for customers to interact with the metaverse and providing financial services involving crypto
~ [1]https://blockworks.com/news/wa... [blockworks.com]
[1] https://blockworks.com/news/walmart-files-7-us-patents-examining-potential-monetization-of-nfts-metaverse
Re: (Score:2)
> Fast forward to the 2000s, and companies like Amazon pushed things further with dynamic pricing systems that constantly adjust based on demand, competition, and user behavior. Same basic goal as always, just massively more data and speed.
The line is "user behavior". Lowering price based on demand and competition are fine. As soon as you drag user behavior in, one of two things will happen:
Users will figure out how to game their behavior so that you will give them a lower price.
You'll accidentally do something that causes illegal discrimination against someone based on a protected characteristic and find yourself fined orders of magnitude more than you gained.
You may do both at the same time. This sort of behavior, IMO, falls under the c
Title Correction: (Score:2)
> Walmart Wins Patents To Give Algorithms More Sway Over Prices
"Walmart Wins Patents To Gouge Customers of Their Money"
...or "U.S. Patent Office Run by Rubber Stamping Monkeys"
There FTFY.
For everybody? (Score:5, Insightful)
If they're just changing the prices of everybody dynamically, I don't see why they need a patent. Every store already does that. Is this just so they can do it faster; adjusting e-ink tags on shelves throughout the day? I feel customers might actually find ways to game this system and unify to drive down prices if they can master the algorithm and utilize social media. I'd love to see this backfire and Walmart end up losing millions.
The real danger is dynamic prices per person. Since the article is pay-walled, I'm not sure if that's mentioned. I think it should be totally illegal to charge different people different prices, based on facial recognition or anything else. Every single person should always be given the same price. This is a known problem on travel websites, where if you've visited before, they'll often only give you the prices for more expensive seats .. where if you use a different browser from a different location without being signed in, you can see the original cheaper sets you were looking at earlier haven't been sold yet.
Re: (Score:2)
Going by "Walmart said that both patents were "unrelated to dynamic pricing," as the patent issued in January was specific to markdowns" it sounds like they are going to try the argument that it's not evil dynamic pricing; it's glorious personalized savings!
Those are the same thing arrived at by superficially different routes, obviously; but in terms of the psychology it wouldn't be at all surprising if you can convince people that being offered discounts calculated to be just big enough to get them to b
In future news (Score:2)
Walmart customers with the last names, "King", "Prince", "Duke", and "Zuckerberg" have suddenly found prices suddenly increased for them.
The law of supply and demand is real (Score:2)
In the past, managers reacted to current demand and guessed what future demand might be
This is an attempt to let AI do the guessing
I guess that it won't make anything better
Price Machine (Score:2)
My partner is a price machine.
They can tell you exactly what the prices are for regularly purchased goods at every single store we frequent.
I can point to avocados and ask if thatâ(TM)s a good price or not, and they can tell me the prices of every other place they have been to.
It appears Walmart is beginning to mess with this. But if the prices go up and fluctuate then we will simply stop shopping there. We will, in fact, start going to the small discount grocery places which have sprung up in the area
Price Gouging (Score:1)
So... hurricane hits, Walmart algorithm foresees big uptick in demand for essentials and jacks up the price. Isn't that illegal price gouging?
Or it's 4th of July in Myrtle Beach. Lots of visitors. So Walmart algorithm jacks up their prices. Isn't that also price gouging?
I'd like to see how this works with laws on the books for price gouging. This just smells bad.
How patentable? (Score:2)
Clearly they got the patent, so somebody was convinced; but I'm puzzled by what you could actually patent at this sort of scale. I could imagine an specific implementation involving some genuinely clever techniques that might be novel enough to patent; or a specific good implementation being a juicy trade secret; but at a high level "try to do some price discrimination while balancing sales rate and margin" sounds like a classic "ancient obvious thing; but we envision a system involving a computer" patent.
Good news (Score:2)
I'm sure some people will find this patent to be deeply upsetting, but Walmart having patented it hopefully ensures that no other stores will be able to use it. It's been years since I've shopped at a Walmart so them doing this doesn't affect me at all. Perhaps this patent could be granted in perpetuity so that other stores are unable to use it after the usual 14/28 year period.
Re: (Score:3)
I stopped shopping at Wal-Market from before 2010 until 2022. But Target's entire entry into inappropriate children's books, sexualized children's' clothing and literally satanic pride pins (I don't even believe in god and find it problematic) led me to go back to Walmart on occasion when I need things I can't get at the grocery store. It's sad Walmart is now the less-evil one. Still haven't shopped at Amazon since 2016.
Re: (Score:2)
> and literally satanic pride pins (I don't even believe in god and find it problematic)
Satanism has nothing to do with Christianity except questioning it and opposing its evils. If you're opposed to satanism then you're effectively supporting Christianity.
Re: (Score:2)
Sorry, evangelical, wrong answerr. I normally refer to "Christian Satanists", like the entire US administration, as opposed to say the Satanic Temple, which is an organization dedicated to the separation of church and state.
For 'markdowns' only? (Score:2)
> automatically updating item prices" to carry out markdowns in its ecommerce unit
Not bloody likely...