Instacart’s AI Program Changes Pricing on Identical Goods, Study Finds

Instacart’s artificial intelligence (AI) price-optimization software, dubbed Eversight, charged customers higher prices for identical grocery orders by as much as 23 percent, a recent investigation found.

The online delivery service confirmed on Dec. 9 that it is using Eversight to conduct ongoing pricing experiments with 10 grocery retailer partners with the goal of optimizing price markups on goods consumers want the most. Retail markups and same-as-store pricing policies are controlled by retailers, the company noted.

“These short-term, randomized tests help retail partners understand category-level price sensitivity so they can sustainably invest in lower prices where consumers care most,” Instacart said in a company blog post.

An analysis published earlier on the same day by an investigative team from Consumer Reports, Groundwork Collaborative, and More Perfect Union found that prices for identical goods often varied widely between consumers. The group conducted four identical online Instacart shopping sessions with 437 volunteers at stores in North Canton, Ohio; Saint Paul, Minnesota; Seattle; and Washington, D.C., to gather pricing data on the same 18 to 20 products, with a fifth group purchasing the same items at physical store locations.

Approximately three-quarters of products had different price points, the team found. Price points per item ranged from an additional $0.07 to as much as $2.56. In a September test, the Instacart volunteer shoppers saw prices ranging from $114.34 to $123.93 for the same 20 products, with just 8 percent of shoppers receiving the lowest total amount.

Some goods—Premium saltines and Heinz ketchup—were priced exactly the same among stores. Other goods had medium markups, while a package of Oscar Meyer turkey varied in price nearly 23 percent, the researchers found.

Instacart was founded in 2012 as an online grocery delivery service. In 2022, it acquired Eversight to expand its reach into AI-generated pricing and promotions. Chris Rogers, Instacart’s CEO, said in November’s third-quarter shareholders letter that AI underpins all aspects of its business.

“AI is the newest pillar of our enterprise offerings—and we’re introducing Instacart’s AI solutions at the exact moment retailers need us most,” Rogers said. “Our tools bring powerful, practical capabilities to help grocers compete and win.”

The Consumer Reports investigative team said the AI software tested how much stores could potentially charge for goods before customers chose not to buy, a model that differs from dynamic pricing, which is established by supply and demand.

Grocers are deploying AI and other tools to deliver personalized pricing and discounts to individual shoppers, the team added, though Instacart said its Eversight testing program did not collect any user-level behavioral or personal data.

“It’s the age-old dream of retailers to charge every person their absolute maximum price, now supercharged by data,” said Lina Khan, former chair of the Federal Trade Commission and professor at Columbia Law School. “We are moving from a transparent market with public prices to an opaque world where we are alone against secret algorithms.”

Instacart said its partner network includes more than 1,800 North American retailers. The company delivers from more than 100,000 stores in 15,000 cities.

The Epoch Times reached out to Instacart for comment on its use of AI and Eversight in its pricing tests.