Instacart's AI-driven personalized pricing created a PR crisis because it directly conflicts with the grocery industry's core value proposition of low, consistent prices. This was especially damaging during a period of high inflation, making the company appear exploitative in a price-sensitive market.
Influencing $3 billion in Black Friday sales, AI shopping agents automate both product discovery and price hunting. This ushers in an era of "self-driving shopping" that forces radical price transparency on retailers, as AI can instantly find the absolute cheapest option online for any product.
Costco is suing the Trump administration over tariffs, not just as a legal strategy, but as a public relations move. It signals to customers that Costco will fight anyone, even the president, to uphold its core value proposition of saving people money.
Maximizing profits in a crisis, such as a hardware store hiking shovel prices during a blizzard, ignores the powerful economic force of fairness. While rational by traditional models, such actions cause public outrage that can inflict far more long-term brand damage than the short-term profits are worth.
AI uses shopper clickstream and sales data to segment customers and SKUs with precision. This allows brands to offer targeted discounts where needed, maintaining trust by avoiding deceptive practices like shrinkflation and being transparent about necessary price increases on less elastic products.
AI analyzes sales, operations, and media data to identify price elasticity across product bands. Brands can then increase prices on premium items where consumers are less sensitive, while keeping prices flat on essentials, thus protecting margins without alienating the entire customer base.