Retailers Adjust Online Prices Based on Demand and Consumer Data

Prices for the same online items shifted by as much as 36 percent over a four-week period at one retailer, according to a CBS California Investigates review of three shopping carts. The review tracked items left in carts at Old Navy, Target and Amazon between late April and late May.

Old Navy's cart total moved between $225 and $143. Target's six-item cart ranged from $170.11 to $135.54. Amazon's seven-item cart rose from $269.08 to $274.57.

Dynamic pricing uses real-time data on supply, demand and consumer characteristics to set prices, said Anthony Dukes, a marketing professor at the USC Marshall School of Business. Retailers may charge different amounts based on shopping history, device type, time of day or day of the week.

Dukes said companies have long used the approach and that algorithms and data have sped up the changes. He noted that retailers sometimes randomize prices so shoppers cannot predict when lower prices will appear.

Online shopper Kat Wilson said she waits for sales but now finds the strategy harder because prices can rise after she adds items to a cart. She described the process as a guessing game. Amazon stated it does not adjust prices based on individual shopping habits and said its prices often change to match competitors or reflect updates by independent sellers.

Target said some price changes during the review period resulted from promotions such as a 30 percent discount on dresses. Old Navy did not respond to three email requests for comment. Target and Old Navy allow price adjustments within 14 days of purchase.

Amazon does not offer adjustments.