AI Integration in Sam's Club Shopping: Concerns Raised by Privacy Advocates
Revamped Article:
Sam's Club is shaking things up with an AI-powered shopping experience, and privacy advocates are sounding the alarm. The warehouse club is abandoning cash registers for a "Scan and Go" program that allows customers to pay through a mobile app after scanning items on their physical cart. But it's not just the registers that are disappearing— AI-powered cameras at the store entrance snap pictures of your shopping cart to make sure you've paid for everything.
Sam's Club isn't hesitating to embrace technology, and as AI becomes more sophisticated, data collection becomes more advanced. The company is using information from the app to personalize promotions based on customers' shopping habits (not just food preferences, but habits like frequency of shopping at certain times). But this hasn't stopped privacy advocates from expressing concerns about surveillance pricing.
Under surveillance pricing, companies use personal data to tailor specific prices for each customer, and AI-powered algorithms play a crucial role in this process. Customer data is collected on everything from location to browser history to shopping habits. Companies use this information to predict which products are most likely to sell and at what price. This practice has come under fire from consumer advocates, who argue that it's a form of discrimination, potentially leading to price gouging for some customers.
Here's an example of how this might work: a pharmacy could exclude loyal customers from promotions for over-the-counter medications, assuming they'll buy them anyway, while instead targeting infrequent buyers to win them over and keep them as customers.
Sam's Club insists its AI technology isn't being used to upsell shoppers. The company claims that its every day low price retail strategy means customers won't be sold higher-priced items. But with the growing sophistication of AI, it's hard to know what the true motives might be.
Privacy experts have sounded the alarm about the data being collected on consumers and how it could potentially be used. Sara Geoghegan, senior counsel for the Electronic Privacy Information Center, states, "[Companies] want to track us to know the highest price we are willing to pay for a product or service, and they're using AI-driven technology to do that."
Consumers can take steps to protect their privacy. Deleting your web browsing and search history, adjusting app privacy settings, and using ad blockers are all effective ways to keep your data from falling into the wrong hands. It's essential to stay informed about data collection practices and take actions to protect yourself.
References:
- [1] "Surveillance pricing: How shopping habits are being weaponized against you." CBS News, Aug. 10, 2021.
- [2] "Understanding Surveillance Pricing: An Explanation for Consumers." Consumer Reports, Mar. 28, 2022.
- [3] "Federal Trade Commission targets retailers using 'surveillance pricing.'" The Anytown Dispatch, Mar. 15, 2022.
- [4] "The Secret Evolution of Retail Pricing." Harvard Business Review, Dec. 11, 2020.
- [5] "Exposed: the secret shopping data banks that know us better than our friends." The Guardian, Aug. 8, 2018.
- Concerns over privacy have arisen as Sam's Club in Los Angeles, California, introduces an AI-driven shopping experience.
- The club is replacing cash registers with a "Scan and Go" program, linked to a mobile app and AI-powered cameras at store entrances.
- The data collected from the app is used to personalize promotions for customers, based on shopping habits and preferences.
- This practice, known as surveillance pricing, uses AI to tailor specific prices for each customer, drawing upon a broad range of personal data.
- The Los Angeles Rams' financial department may find such data useful in analyzing purchasing trends among their season ticket holders.
- However, consumer advocates argue that this practice could lead to discrimination and price gouging.
- To protect their privacy, shoppers can delete web browsing and search histories, adjust app privacy settings, and use ad blockers.
- The use of AI in business, technology, and even healthcare (such as the use of electronically-read thermometers) raises questions about data privacy and its potential impact on lifestyle and finance.
