Big Data and Big Business Can Mean Big Rip-offs

Big Data and Big Business Can Mean Big Rip-offs

By Alex Gladu, Independent We Stand

Travel sites and online superstores boast loudly about the unbeatable deals they can offer consumers. But what they haven’t told you is that they might be beating their very own offers – on someone else’s computer.

Retailers, search engines and data companies have been increasingly criticized for tracking consumers’ online activity. This “big data” has been used to tailor advertisements and prioritize search results, reportedly to help shoppers find what they’re looking for and discover similar products that they never knew they needed. Now, online retailers seem to be taking it a step further, and they could be cheating your wallet in the process.

A report from Northeastern University recently found that major online retailers starting to use big data for a tactic called price steering. Simply put, price steering involves retailers quoting different prices for the same good or service to different people. According to the university researchers, two people can go to an online retailer’s website and search for the same product, but the price they see will differ based on their recorded shopping habits. While the report noted that price steering is not yet a widespread practice, it charged travel sites like Orbitz and Travelocity and general merchandisers like Home Depot with producing price discrepancies. All in all, nine of the 16 well-known retailers studied displayed evidence of price steering.

Companies under fire have explained the price discrepancies by arguing that prices can vary based on location, but the news remains troubling nonetheless. Large, online retailers can buy consumer data from sites like Facebook and Google, giving them more power over consumers looking for the best deals and the highest quality products.

As big data grows bigger and large companies grow more powerful, small brick-and-mortar businesses are still looking out for consumers. Large, online retailers funnel profits out of local communities and, in many cases, they don’t have to pay state and local sales taxes. Small locally owned retailers, on the other hand, return three times more money to local communities than national chains, and they offer valuable benefits to consumers like flexible return policies, expert advice and personal service.

Big data and big companies can have big impacts on your wallet. Read more from Northeastern University’s report here.

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About the Author

Alex is a senior at the University of North Carolina at Chapel Hill, where she is double-majoring in Public Relations and Spanish.  Since becoming a writer for Independent We Stand, she has fully adopted the ‘buy local’ lifestyle.  Her favorite indie business is Sugarland, a bakery in Chapel Hill, N.C, where she has been known to go a little cupcake crazy. She hopes to attend law school and pursue a career in nonprofit or political communication.


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