Retailers are expanding digital shelf labels and software that recommends prices or discounts, prompting questions about how much shopper information businesses collect and whether it affects what individuals pay. The systems are used in stores, restaurants and online marketplaces, where companies see potential gains from lower operating costs, faster responses to demand and more targeted promotions.
The technologies serve different purposes. Dynamic pricing changes charges as supply, demand or other market conditions shift, while personalized pricing uses customer information to tailor prices or offers. Digital shelf labels only let stores update displayed prices electronically; their use alone does not show that different shoppers are being charged different amounts. Walmart says its labels reduce employees’ workload and keep shelf prices current without changing prices for individual customers.
Regulators and lawmakers are examining the boundary between those practices. Lawmakers in at least 30 states considered pricing legislation, while Maryland, New Jersey and Connecticut enacted restrictions on using personal information to determine retail prices. A federal enforcement proposal warns that failing to disclose the use of personal data to set individualized prices could violate consumer-protection law. A related federal study found that pricing intermediaries serving at least 250 clients, including grocery and clothing retailers, could use information such as precise location, demographics, browsing history, mouse movements and abandoned shopping carts to tailor prices or promotions.
Competition concerns have added another legal risk. In its case against Amazon, the Federal Trade Commission alleges that a discontinued tool called Project Nessie raised prices on products when competing online stores were likely to follow. A separate lawsuit alleges that McDonald’s pricing system uses nonpublic information from competing franchise locations to coordinate prices, while the company rejects the allegations and says the tool supports independent franchisees’ pricing decisions.
Business adoption continues despite the scrutiny. A survey of more than 2,200 executives across 28 countries and 39 industries found that 41% used AI to gather market intelligence, including competitors’ prices, and 28% used it for real-time price optimization. The commercial question is whether retailers can use those systems while clearly distinguishing operational price updates from individualized pricing and practices that regulators or courts may view as harmful to competition.