Instacart ends price tests on groceries after customer feedback
It's back to business as usual for Instacart. The grocery delivery service has announced it will end price testing, following customer concerns over a recent study that showed the company's AI technology allowed retailers to charge shoppers different prices for the same items.
"Our customers have high expectations for Instacart. And for some, we fell short of those expectations," the company said in a statement on Monday.
"We've listened carefully to feedback from our customers. And we understand that the tests we ran with a small number of retail partners that resulted in different prices for the same item at the same store missed the mark for some customers," it continued. "At a time when families are working exceptionally hard to stretch every grocery dollar, those tests raised concerns, leaving some people questioning the prices they see on Instacart. That's not okay -- especially for a company built on trust, transparency, and affordability."
The company said it would be "ending all item price tests" on its platform, "effective immediately."
"Retailers will no longer be able to use Eversight technology to run item price tests on Instacart," it said.
Instacart acquired Eversight, which it describes as "an AI-powered pricing and promotions platform," in 2022. At the time, the company said the acquisition would allow retailers "access to new individualized and customized pricing tools and dynamic insights via Instacart that connect the dots between online and offline behavior to improve sales and growth."
Instacart previously addressed how its pricing works following a case study from Groundwork Collaborative and Consumer Reports, published Dec. 9.
The study examined data from nearly 200 grocery shoppers in four U.S. cities and found that some shoppers paid different prices for the exact same cart of food at the same time, with three quarters of all grocery items offered at varying prices.
At the time, an Instacart spokesperson acknowledged to ABC News that pricing experiments were taking place, but stated that they were "limited, short-term, and randomized tests help retail partners learn what matters most to consumers and how to keep essential items affordable."
In its statement Monday, Instacart reiterated that the tests "were not dynamic pricing or surveillance pricing" and were not based on "supply or demand, personal data, demographics, or individual shopping behavior."
What to know about Instacart grocery prices
The company on Monday also detailed what Instacart shoppers can now expect since it dropped pricing experiments.
"Retail partners will continue to set their own prices on Instacart, just as they always have. And just as retailers set different prices for items in their different brick-and-mortar store locations, retail partners may choose to vary the price of items on a store-by-store basis on Instacart, as well," the company stated. "But from now on, Instacart will not support any item price testing services."
"Now, if two families are shopping for the same items, at the same time, from the same store location on Instacart, they see the same prices -- period," it added.
The company said it will encourage "partners to remove markups where possible and better align their online prices with their in-store prices."
Instacart also said it will clearly display retailer pricing policies on the digital storefront for customers to see "when a retailer chooses to apply markups."
