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Orbitz shows Mac users pricier hotels

How Orbitz and other online retailers personalize their offerings -- and sometimes prices -- based on how they expect you to spend.

By MSN Money Partner Jun 27, 2012 11:35AM

This post comes from Quentin Fottrell at partner site SmartMoney.

 

One price doesn't fit all online. Retailers adjust prices and discounts based on each customer's online habits and persona.

 

Travel website Orbitz says it sometimes shows customers using Apple computers more expensive travel offers than it does for Windows visitors, as the former typically spend 30% more, The Wall Street Journal reports.

 

But that's just one of many variables sites use to set prices, e-commerce experts say. (Post continues below video.)

"It's common practice for retailers to make offers based on everything from your ZIP code to the kind of smartphone you're using," says Robert M. Weiss, the technology practice group chairman at Neal Gerber & Eisenberg. Weiss notes the practice is legal as long as the vendor doesn't change prices based on race, religion or gender.

 

Image: Creditcard Computer (© Stockbyte/SuperStock)The customer's location in particular has a huge influence on the size and quality of discounts, experts say. For one, if a customer lives near one of the retailer's warehouses, it will cost less for the company to throw in two-day free shipping. "Retailers know that free shipping is a huge motivator to get people to buy," says Ashok Narasiman, the CEO of Mountain View, Calif., e-commerce site Runa.com, which counts eBay among its clients.

 

The climate or weather might also be a factor in snagging a deal: If an online retailer knows you're shopping from Seattle during the rainy season, it may charge more for raincoats the same way street vendors raise umbrella prices during a downpour, says e-commerce consultant Bryan Eisenberg.

 

Which sites were visited prior to purchase also plays a role in the retailer's price.

 

Online retailers track consumers every move online through their "cookies" -- little pieces of code stored on computers or mobile devices. Visiting an online retailer by clicking through an ad may make a discount less likely if the retailer has to pay the search engine for redirecting the customer, Narasiman says.

 

Other sites reserve discounts for new customers only, says Feras Alhlou, a co-founder of E-Nor.com, a digital analytics consultant in Santa Clara, Calif. "Existing customers need to delete their cookies to see these discounts, too," he says.

 

Even the words entered in to a search engine may impact prices, experts say.

 

If a retailer knows a consumer searched for "size 10 patent leather men's shoes," the company might be more likely to give a $10 discount or throw in a free pair of socks, Narasiman says.

These are known as "long-tailed" searches, he says. "The more detailed the search, the more likely the consumer will make a purchase," Narasiman says.

 

He says it costs far more in marketing and advertising to win a customer back if he comes to the site and leaves without making a purchase. "If retailers feel they're close to buying but need that extra nudge with the right and relevant offer," Eisenberg says, "they will do just that."

 

More from SmartMoney and MSN Money:

 

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