Swiss supermarket introduces personal pricing; the more you buy lesser discount you get

If you have a lot of money, you will pay more in a Swiss supermarket.  The supermarket chain Migros, one of Switzerland’s largest retailers, is testing discount systems, which is precisely tailored to respective customers. In September, Migros launched a pilot project in three stores (Zurich, Aare and Geneva), according to a report in the NNZ newspaper. Customers with Cumulus loyalty cards would receive “personalised discounts” – either at the till or on their app – based on their consumer behavior.

Customers who regularly buy expensive items like olive oil or chocolates will be offered no discounts on these items in future. The retailer calculates that this customer group is likely to buy more expensive products anyway. So they do not need discounts, says Migros.  According to the new pricing the rich should pay more for the same products when shopping. Customers who do not spend a lot of money can get a discount in the future in order to be seduced to buy. “Initial experiences show this is greatly appreciated by our customers,” said Migros spokesman Luzi Weber.

The idea is to encourage people who only occasionally buy something, whether it’s a bar of chocolate or mouthwash, to buy it regularly by giving them a discount on their next purchase. Market experts estimate that the system can earn a growth of revenue of around 8%.

Dynamic prices are nothing new in supermarkets, which have always adjusted prices from day to day depending on demand and approaching best-by dates. But these dynamic prices should apply to everybody, says Sara Stalder, director of the Foundation for Consumer Protection. “Personalised prices on the other hand are problematic,” she told the NZZ am Sonntag. “If someone is classified as a ‘heavy shopper’, they could not only be charged higher prices but also be kept in the dark about any discounts. Both are unacceptable.”