According to this article in the NY Times, Supermarket chains like Kroger, Safeway and Ahold (Stop ‘n Shop) are experimenting with with personalized pricing for their customers.

What’s personalized pricing? It’s providing different pricing to customers based on their specific buying habits like this:

At a Safeway in Denver, a 24-pack of Refreshe bottled water costs $2.71 for Jennie Sanford, a project manager. For Emily Vanek, a blogger, the price is $3.69.

The difference? The vast shopping data Safeway maintains on both women through its loyalty card program. Ms. Sanford has a history of buying Refreshe brand products, but not its bottled water, while Ms. Vanek, a Smartwater partisan, said she was unlikely to try Refreshe.

So Ms. Sanford gets the nudge to put another Refreshe product into her grocery cart, with the hope that she will keep buying it, and increase the company’s sales of bottled water. A Safeway Web site shows her the lower price, which is applied when she swipes her loyalty card at checkout.

Safeway added the personalization program to its stores this summer. For now, it is creating personalized offers, but it says it has the capability to adjust prices based on shoppers’ habits and may add that feature.

Basically it’s “on the fly” coupons targeting customers likely to try a specific product.

So what’s the downside?

If your a regular customer of a brand or product, say Tide for example, you may have to pay more for a box of the detergent than someone buying the product at the exact same moment. The pricing model is expected to extend to other grocery chains — and over time could displace standardized price tags.

Joseph Turow, a professor at the Annenberg School for Communication at the University of Pennsylvania, said shoppers should be cautious. The pricing at grocery stores and other retailers is not transparent enough to give consumers any real power or choice, he said, and “there’s a sense of fairness that’s derailed here.”

In a 2005 survey conducted by Professor Turow, most adult respondents did not know that retailers could legally charge different prices, and more than 90 percent said they would dislike it if their supermarket charged different prices to different people within the same hour.

Retailers say the groundwork has been laid with individualized coupons, which are resoundingly popular. Sites like Amazon have also made consumers comfortable with custom offers and varying pricing, they say

So if personalized pricing is the future for retail, how can you win?

Some shoppers are already figuring out ways to beat the system. Two women, both of whom live in the Denver area, were among the first customers that Safeway asked to test its pricing program in return for a $50 gift card.

Like any good shoppers, these ladies are already starting to game the system: One noticed that she received cheaper prices on ground coffee when she alternated between Starbucks and Dunkin’ Donuts brands rather than buying just Starbucks.

Either way wih technology , retailers are trying to get the shirt of your back

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