Walmart once again defends its pricing policy; disputes author’s claims
Walmart doubled down on its pledge that it does not engage in dynamic pricing, releasing an open letter refuting what it calls repeated mischaracterizations of its pricing practices and use of technology by economist Lindsay Owens.
The letter, signed by Walmart executive VP of corporate affairs Dan Bartlett, is addressed to Owens, hose recent book, “Gouged,” examines corporate pricing technology. She is also the CEO of progressive economic policy think tank Groundwork Collaborative. (The letter comes about a week after Walmart CEO John Furner released a statement in which he said that the company is not using digital shelf labels or other technologies to personalize pricing.)
“Your account does not accurately describe our practices or our plans," Bartlett wrote in his letter. “So, we are asking you to correct the record.”
In the letter, Bartlett noted that Walmart does not — and will not — use an individual customer’s personal information, income, shopping history, urgency or willingness to pay to set an individualized price.
“We do not engage in dynamic pricing, raising prices in response to a hot afternoon or an approaching snowstorm, for example,” he wrote. “The facts are straightforward. We price products, not people.”
The letter directly takes on several of Owens’ claims, including its use of digital shelf labels. Owens has described Walmart’s rollout of digital shelf labels as part of an infrastructure for “real-time dynamic pricing,” and said its rollout could allow for the possibility of higher prices for ice cream on hot days and soup during snowstorms.
[READ MORE: Walmart plans chainwide rollout of digital shelf labels]
“You framed these examples as what the technology could enable, but repeatedly using Walmart to illustrate them implies this is where our business is headed,” Bartlett wrote. “It is not.”
As the retailer has said in the past, Bartlett said digital shelf labels replace paper tags and allow approved price changes to be displayed more efficiently and consistently. They do not identify customers, nor do they independently set prices.
“The ability to update a display more quickly is not evidence that Walmart uses it, nor intends to use it, for dynamic pricing,” he wrote. “Walmart does not and will not use digital shelf labels for individual or dynamic pricing.”
Bartlett also addressed Owen’s “reliance” on Walmart patents as evidence that the chain will pursue individualized or dynamic pricing. (Groundwork recently released a report highlighting several Walmart patents for various technological pricing capabilities.)
“A patent describes an invention and potential capabilities,” he wrote. “It does not mean that Walmart has deployed a capability, used it with customers or decided to do so in the future. Those conclusions require evidence beyond a patent."
Sparky
Owen’s comments about Walmart’s AI-powered shopping assistant, Sparky, also drew “unfounded conclusions,” according to Bartlett. Owens has called out higher average order values among Sparky users as evidence that the technology could be encouraging customers to spend more or "bidding up their cart total."
“We do not use AI to upcharge our customers,” he wrote. “Still, you have said customers who use Sparky spend 35% more than those who do not, in part because Sparky is “bidding up their cart total. Higher average order values do not, on their own, establish that Sparky caused customers to spend more on individual items. They certainly do not establish that customers were charged higher prices for the same items.”
Owen’s Response
In response to Bartlett, Owen defended her positioning, saying “the confusion around Walmart’s pricing practices is of its own making.”
“Walmart says one thing in its damage-control letters to customers, another to its investors behind closed doors, and a different thing entirely to the United States Patent and Trademark Office,” she wrote.
Owens described Groundwork’s analysis of Walmart’s patents, which spans more than a decade, as “sobering.”
“The arsenal of technologies the company is building that can be used to profile and track us should worry every American who is concerned about their privacy and pocketbooks,” she wrote.