A simple Swingline stapler from the office supply chain Staples could cost you either $15.79 or $14.29, depending on where you live. And the same is true for other products from Staples, as well as at Home Depot’s online store and other retailers, according to a new report by the Wall Street Journal.
Such pricing differences are common in brick and mortar retail stores, but it’s a new development on the web, where physical location has traditionally mattered less (except when calculating taxes, and in some cases shipment costs). Inspired by academic research in online price discrimination from Universitat Politecnica de Catalunya and Telefonica Research, the WSJ built a custom solution to test out precisely what influenced prices at online retailers.
In addition to a customer’s general location, Staples offered discounted prices to customers within 20 miles of rival stores like OfficeMax and Office Depot, the WSJ found — which ended up being the single biggest factor in price differences. As a consequence of that, Staples ended up offering higher prices to less wealthy customers in rural and urban areas, where there aren’t many stores.
Rosetta Stone, which offers language learning software, also offered significant discounts to customers based on their location. The company admitted to the WSJ that it tests different bundles and prices in different areas, and it also personalizes deals based on how people reach the site.
As we move towards a more personalized web experience for ads and shopping recommendations, it’s inevitable that we’ll see even more creative pricing from online stores. For the most part, they’ll come in the form of deals and discounts. But the WSJ’s research is a good reminder that, in certain cases, you may end up spending more than other online shoppers.