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Online Retailers Track Consumer Spending Habits To Get Wealthier Customers To Spend More

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Online retailers are tracking all kinds of data about consumers, and using that data to adjust prices.
Online retailers are tracking all kinds of data about consumers, and using that data to adjust prices.

Smart online shoppers may want to do some extra research before clicking "buy." New technology could be turning the tables on the common consumer, allowing online retailers to determine who is willing to pay more.

Last week the Wall Street Journal reported that Mac users browsing travel sales site Orbitz.com often saw different and sometimes costlier travel options than their counterparts using PCs.

According to the article, Orbitz knows that Mac users spend up to 30 percent more per night on hotels booked online than PC users. This got us thinking: What else do online retailers know about our spending habits?

It turns out it's not just Orbitz that's judging consumers. Consultant Andrew Fano recently told the Economist that at least six of the United States' 10 largest online sellers engage in this kind of practice based on data they collect from web users. Online retailers track users' web activity through cookies, or small files stored in web browsers; new software of the sort that Orbitz used to differentiate between Mac and PC users allows firms to create specific profiles on individual shoppers, the Economist reports.

Retail sites can guess whether you're rich or poor, male or female, young or old and then decide what to sell to you. Your zip code, the brand of your smartphone, the sites you visit before making an online purchase and even the words you type into the search bar can all be used against you, according to SmartMoney.

As for the data points used to adjust prices, legally anything is fair game, technology law expert Robert M. Weiss told SmartMoney, so long as sites don't use your race, religion or gender.

Brick and mortar retailers have also been known to keep track of in-store shopping habits, even looking into public records to find out, say, when a customer had a baby to know exactly when to start bombarding her with relevant promotions, The New York Times reported in February.

And price customization has been going on as long as markets have been in existence. Forbes aptly quoted Adam Smith, the father of modern economics, on the topic: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

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