Walmart disowns the cart-based pricing its 2023 shelf-label patent describes

A shopper using Walmart's Scan and Go drops a can of tuna into the cart. In a patent Walmart holds for remotely controlling electronic shelf labels ^[1], that can is a pricing input. The text says that for a customer using Scan and Go, the items in the cart may be known, and the price of other items the customer buys may vary based on what is already in the cart. Its example is a customer with tuna fish, who may be offered a different price for mayonnaise ^[2].

Walmart's denial ^[5] rests on separating the thing patented from the thing done. "A patent describes an invention and potential capabilities," Dan Bartlett wrote. "It does not mean that Walmart has deployed a capability, used it with customers or decided to do so in the future. Those conclusions require evidence beyond a patent." ^[8] On the evidence, he has a point. The record in Gizmodo's report is the patent text and Owens's reading of it ^[2][4]; it does not include a shopper charged a cart-based price.

The pledge is narrower than the patent. "Putting tuna in a customer's cart does not cause Walmart to charge that customer more for mayonnaise. We do not do that, and we will not," Bartlett wrote ^[9]. The patent says "a different price" ^[2], and a lower price is a different price. Gizmodo defines surveillance pricing as adjusting prices for individual consumers based on their personal information ^[6]. By that definition a cart-triggered discount on mayonnaise counts as much as a markup.

Here's what teams tell themselves users do: read a patent the way Bartlett describes it, as a list of things that might happen. Here's what users actually do: hear the tuna example from Owens, who has given interviews including one with Jon Stewart ^[11]. Her version is short. She told Gizmodo that "the example they give is tuna and mayonnaise. Once you have the tuna, they can change the price of mayonnaise" ^[4]. The labels are going into stores nationally ^[13]. In our view, a shopper looking at one cannot tell whether a stock count or a cart moved the price.

This is for the pricing or merchandising lead at a retailer with digital shelf labels and an app that knows the cart. We think two questions sort the exposure. The first is whether the input describes the product, as the patent's supply clause does ^[3], or the person, as the tuna clause does ^[2]. The second is whether the capability is only written down or running in stores.

A product input that exists only on paper carries the least exposure. Run in stores, it is ordinary dynamic pricing, and even that has a record: Coca-Cola's 1990s experiment with raising prices on hot days met immense public outrage, according to Gizmodo ^[14]. A person input on paper is where Walmart says its cart pricing sits, and the company still spent this week defending it ^[5]. A person input running in stores is surveillance pricing by the definition above ^[6].

We'd recommend keeping cart contents out of any price rule and putting that rule in writing, stated in terms of inputs. The cost is giving up cart-triggered discounts along with the markups. The forcing test for Monday: if two shoppers can see different prices for the same item at the same moment, the team should be able to name an input that did not come from either shopper. A team that cannot is in the last cell, whichever direction the price moved ^[2][9].