(WXYZ) — Today is Cyber Monday, a day packed with online deals and discounts. As you fill up your virtual shopping cart this holiday season, you may notice something: the price of items seem to constantly change.
Watch Jolie's story in the video player below
You may have experienced dynamic pricing before with airline tickets, hotels, and rideshare services; the price constantly changes.
"You can check one minute, and it's one price and two more minutes, and it's $20 more," said Eric Mitchell.
Online businesses like Amazon and Wayfair are doing this, too, adjusting their prices more frequently with the help of artificial intelligence.
“Essentially, you can think of AI agents serving as essentially other data analysts, who are making these somewhat algorithmic decisions of essentially monitoring how different products are performing, and making these price adjustments on the fly," said Jason Miller, a Supply Chain Management Professor at Michigan State University.
Miller said dynamic pricing is based on a number of factors, including prior sales, inventory levels, and how competitors are pricing the product.
“In a weak demand environment, in many instances, consumers will benefit if the retailer you're shopping at is saying, 'ok, wait, are they looking elsewhere, that elsewhere is right now charging 4% less than us, we may lose the sale, we need to lower our prices', versus, again, in a demand environment that's much stronger…where algorithms like this may result in prices rising even more rapidly than you would otherwise expect," Miller said.
But these constantly changing costs are difficult for Tracy Burks, who works for an insurance company based in Southfield and prices thousands of items a day for clients that have lost their homes in disasters.
“Every single little thing in your home. I’m pricing everything, I’m looking at everything," she said. "It’s what I do all day long, and yeah, it’s always changing."
With holiday shopping in full swing, here are a few strategies for when to buy:
- Use tools like price trackers to set price alerts.
- Keep items in your shopping cart for a few days. Retailers might actually lower the price of those items.
- Stores may also adjust prices based on your location, so try changing the zip code to see if prices differ.
Shoppers we spoke to say AI-powered prices are frustrating, especially after hearing that algorithms can adjust prices based on your purchase history.
"Maybe we need to start working with brick and mortars, at least there your price is not going to change by a blink of an eye, by some algorithm, by some AI," said Canton resident Devankar Mukhi.
“It feels like it's unethical in a way because it kind of takes advantage of the customer," said West Bloomfield resident Roseann Karana.
Miller said it's safe to assume the item you're eyeing is dynamically priced.
“I’d say it's just the world that we live in, that we can adjust pricing quite quickly compared to 20-25 years ago, where it was just a different, you know, different availability of data," he said.
