Personalized prices per consumer threaten the supply and demand signal, analysts say

After smaller packages sold for the same price, the next step in the inflation felt by the consumer could be the price tailored to each buyer. In an episode of Yahoo Finance's Market Hang, presented by Nancy Tengler, CEO and investment director at Laffer Tengler Investments, participants discussed dynamic pricing and reported cases in which the same product appeared at different values ​​for different people.

Tengler said that, when booking an airline ticket, she was disconnected several times due to inactivity and that, with each new login, the fare was higher. In another report, of an attempted flight from the West Coast to New York for Thanksgiving, the price started at US$2,200 and reached US$8,000, about four times the initial price. According to her, the ticket was not purchased.

Christine Short of TMX Wall Street Horizon reported that during the US Open in September, she and her husband checked Uber at the same time, and his ride was 30% more expensive. For the analyst, the episode shows that consumer distrust is justified, as the practice is already known in airlines and transport apps. She also cited the lawsuit against McDonald's and Walmart's statement that it will not adopt dynamic pricing.

A sign of a market at risk

Anna Rathbun, founder of Grenadilla Advisory, assessed that the problem goes beyond the perception of justice. In her view, the price expresses the balance between supply and demand and serves as a signal for the seller to decide whether to liquidate stocks or replace merchandise. This mechanism, he stated, would cease to function if prices began to be calibrated to the willingness to pay of each individual transaction.

The counterpoint came from Mark Malek, chief investment officer at Siebert Financial. From an investor's point of view, he said, the concept learned in economics of "discriminating if you can" is valid: if a company can charge each customer according to the individual demand curve, that is, in his words, "gold". Malek stated that, upon hearing that Walmart would not adopt the practice, he thought about reducing his position in the retailer's shares, and argued that the company competes with Amazon, which, according to him, already practices this type of pricing.

Tengler, in turn, argued that Walmart and McDonald's should keep prices low, as they serve audiences looking for this attribute. She acknowledged, however, that she fears that some industries and retailers will use artificial intelligence to target prices, as consumers, she said, are "already targeted" by targeted advertising on social media.

Measured inflation and felt inflation

The panel also discussed the difficulty of capturing the health of the American consumer through numbers. According to one of the participants, retail sales measure how much is spent, not how much is purchased: an increase in sales may reflect higher gasoline prices, not greater volume. Tengler noted the contrast between still-steady sales and historically low confidence surveys, like those from the University of Michigan, and said he has started to take these surveys more seriously. She pointed out the "K-shaped" nature of consumption, in which resilience is concentrated in part of the population.

Among those supporting spending, participants cited baby boomers, described as the richest generation in the country's history, with little debt and willingness to spend. According to an estimate cited in the program, 10,000 to 15,000 Americans turn 65 every day.

Tengler also recalled the argument of price elasticity of demand: if prices rise and demand remains the same, this stimulates a cycle of new increases. Short also mentioned the warning that AI assistants, sold as tools to negotiate the best price, can use the user's financial situation against them, which, in the group's assessment, adds another layer of uncertainty for consumers and companies that adopt the technology.

Automatically translated from Portuguese.