The company said that retailers will no longer be able to use Eversight technology to run item price tests on Instacart.
- Instacart acquired Eversight in 2022 whose AI-powered software allows retailers to test customized pricing and promotions directly with their individual customers.
- The company said on Monday that while retail partners will continue to set their own prices on Instacart and they may choose to vary the price of items on a store-by-store basis, Instacart will not support any item price testing services.
- The company also said that the pricing tests were not dynamic pricing or surveillance pricing and added that they were never based on supply or demand, personal data, demographics, or individual shopping behavior.
Instacart (CART) said on Monday that retailers will no longer be able to use artificial intelligence-driven pricing tests on its grocery delivery platform after it drew flak from customers and the federal trade commission.
The company said that retailers will no longer be able to use Eversight technology to run item price tests on Instacart. Instacart acquired Eversight in 2022 whose AI-powered software allows retailers to test customized pricing and promotions directly with their individual customers. According to Instacart, several retailers rely on Eversight to optimize pricing including The Giant Company, Schnucks, and Kroger. Grocers who used Eversight have recorded revenue growth of 1-3%, according to the company.
However, this caused shoppers to pay different prices for identical items from the same store.
“We understand that the tests we ran with a small number of retail partners that resulted in different prices for the same item at the same store missed the mark for some customers. At a time when families are working exceptionally hard to stretch every grocery dollar, those tests raised concerns, leaving some people questioning the prices they see on Instacart. That’s not okay,” Instacart said. “Now, if two families are shopping for the same items, at the same time, from the same store location on Instacart, they see the same prices — period.”
New Pricing Rules
Instacart said on Monday that while retail partners will continue to set their own prices on Instacart and they may choose to vary the price of items on a store-by-store basis, Instacart will not support any item price testing services.
“We’ll continue working closely with partners to remove markups where possible and better align their online prices with their in-store prices,” the company said.
The company also said that the pricing tests were not dynamic pricing or surveillance pricing and added that they were never based on supply or demand, personal data, demographics, or individual shopping behavior.
Eversight Draws Flak
Earlier this month, Consumer Reports noted that the AI-enabled pricing experiments on Instacart caused price differences of as much as 23% for identical products from one customer to the next. The report also said that Instacart’s algorithmic pricing experiments were found to be occurring through the platform at several of the nation’s biggest grocery retailers, including Albertsons, Costco, Kroger, Safeway, Sprouts Farmers Market, and Target.
Following the investigation by Consumer Reports, Reuters reported that the U.S. Federal Trade Commission is probing Instacart and seeking information about its Eversight pricing tool.
How Did Stocktwits Users React?
CART shares traded 2% lower at the time of writing. On Stocktwits, retail sentiment around CART stayed within the ‘neutral’ territory over the past 24 hours, while message volume stayed at ‘high’ levels.
CART stock has risen 8% this year and by about 6.5% over the past 12 months.
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