How ethical is “variable pricing”?

Big data is starting to get interesting or scary depending on how you look at it. Sal Thomas writes in on-line “Marketing” this week about B and Q which is testing electronic price tagging i.e. altering the price of an item based on the profile of the customer.  Basically the system uses data stored from loyalty cards and spending habits then uses chips in customers’ mobile phones to work out a price to be displayed next to the goods on a shelf.  This apparently is being “sold” as a way of rewarding loyal shoppers but the reality is more likely to be “price optimisation” for the retailer. “Smart shelves” are already being trialled (e.g. Tesco) so the question Sal Thomas asks is “when does dynamic pricing risk turning personalisation into discrimination?” 

It is going to be a difficult ethical call for businesses as they compete for, and manipulate, customer data in more complex ways.  These companies could do with taking time out to look at the bigger picture re building sustainable customer trust and keep asking themselves, “just because we can doesn’t mean we should” use the data in these ways. Uber in the US for example showed a lack of ethical judgement when it increased prices dramatically during a snow storm in New York resulting in extensive public criticism (and resulting in official price curbing in emergency situations).  It would be interesting to think about what would have happened in customer loyalty and trust terms if they’d done the exact opposite and showed a genuine interest in customers’ well-being during times of crisis. Until the cultural mind-set of business shifts genuinely towards the customer big data will surely continue to be weighted to exploitation not reward?