Tribune de Genève.
According to the NZZ am Sonntag, in September, Swiss supermarket Migros launched a new system which offers personalised discounts. The discount experiment will run for a year in stores in Geneva, Nyon, Bern and Zurich.
What is it exactly? Those with Cumulus loyalty cards will receive special offers via an app on their phones or personalised discount coupons at check out. Algorithms crunch purchase history data associated with a customer’s loyalty card and decide what discounts to offer. The discounts are product and customer specific. Different customers will end up paying different prices for the same things.
“We will offer individualised discounts to our customers, discounts of particular interest to them” explained Tristan Cerf, a spokesperson for Migros. “A young father will receive, for example, a special offer on disposable nappies, while someone who eats a lot of vegetables will get a discount to try our multi-coloured organic carrots.”
Last year, Switzerland’s other large supermarket, Coop, experimented with a similar system. After a wave of criticism it dropped the concept.
Migros refuses to speak of personalised pricing. It prefers the description “personalised marketing”. The company’s spokesperson said the objective was not to determine how much a customer was prepared to pay for an item, but instead to make discounts more effective and better satisfy customer needs in the hope that they remain loyal. The move is not revolutionary. The only difference is that discounts are offered via our app or at check out instead of, as they are currently, as coupons in the post.
The project has raised criticism. Sara Stadler, director of the foundation for consumer protection, fears that discounts available to everyone may dwindle. National councilor Dominique de Buman, who is co-president of a parliamentary consumer group, thinks it is a way to take customers hostage. “Those without cards won’t get discounts, so they are going to want one. The objective is not to serve customers better but to better serve the retailer.”
Secretary general of the Consumer Federation of Suisse Romande, Mathieu Fleury, warns against creating two classes of customers. “Customers that are more attractive from a marketing perspective get special treatment, while others never get discounts. Special offers are always financed by someone else.”
Some question personal data being used in this way. Lawyer Sébastien Fanti, says “This is not what customers signed up for when they got a Cumulus card. Card contracts need to be updated, clearly indicating how the data will be used, and re-agreed with the customer.”