If you frequent Target often like me, you may have noticed pricing changes from store to store. Coincidence? Hardly. The mega retailer has been practicing “dynamic pricing” or the act of altering pricing based on time of day, location and or demand, for years. The practice is not illegal but it is certainly deceptive, and apparently very popular. Amazon is known to adjust prices every 10 minutes, particularly when they notice customers adding items to their cart. To keep up with the commerce giant, Target followed suit.
In 2019, Minneapolis shoppers reported changes in pricing depending on whether they were using the app inside the store or outside of the store. The customer’s bill was $262 cheaper when they shopped from the back of the parking lot versus inside the store. “Somebody at Target programmed in an algorithm which says someone who is 50 feet within the store is willing to pay more,” George John, a professor at the University of Minnesota Carlson School of Management Marketing, said in a press statement to a local Minneapolis news station. “The most reasonable explanation is that you just revealed your commitment to buying the product, you’re in the store, or in the parking lot. If you are further away, you haven’t quite committed, so I’m going to give you a juicier deal.”
Although this logic, enticing shoppers with deals in order to commit, makes sense — it is sneaky. And it’s not just that, prices are changed based on the city you are in as well. Splitting time in both California and New York in 2020, I too have noticed drops in general household items. Toilet paper is a lot cheaper in Los Angeles than it is in Manhattan. Furthermore, toilet paper is massively cheaper in Bushwick, Brooklyn than the Lower East Side, Manhattan. So why do they do this?
Why does Target change prices?
Pricing is adjusted to reflect the local market. Which isn’t necessarily a bad thing as the retailer allows customers to price match through Price Match Guarantee, ensuring the lowest price. When you enter a Target store, the brand assumes you are seeking out an item regardless of price, therefore raising the price in store. And vice versa, for online customers. Because Target knows the online market is quite vast, it aims to lower prices or add in other incentives to get a sale.
Since the Target app is based on location, be wary of where you select your home city. Cities where income is usually higher, will experience higher pricing. To get around this, you can turn your location off. Other ways to save money and not fall victim to dynamic pricing is by using in-app coupons or their price matching guarantee program.