Is Surveillance Pricing Driving Shoppers Back to Brick-and-Mortar Stores?

A recent New York Times headline proclaimed “Dying Shopping Malls” to be the “Roman Ruins” of our time, but stepping into Boca Raton Town Center points to a possible brick-and-mortar revival. 

“People are realizing shopping online doesn't always mean cheaper; there are way more advantages to coming in person,” said Isotta Donnaruma, a bridal wear model. 

Thanks in part to increasing public awareness of surveillance pricing-- online retailers’ offering different pricing to different people, depending on a variety of factors-- some shoppers are becoming weary of making online purchases and are returning to the malls. Keen to capitalize on shoppers’ suspicion of online outlets, some stores are making a strategic shift and using improved pricing models for more foot traffic. 

Surveillance pricing is a retail strategy that uses customer data to know when people shop, how often they visit, and what they like to buy, among various other demographic metrics, in order to shape prices. This often translates to different people paying different prices for the same item. 

“Surveillance pricing is really about trying to figure out what’s unique about a particular consumer... and then using that to set the price,” said Dr. Alan Mislove, associate dean at Northeastern University’s Khoury College of Computer Sciences.

But surveillance pricing could be backfiring. As some shoppers are shying away from online purchases, retailers in Boca Raton Town Center and elsewhere have been changing their pricing models in order to increase foot traffic by offering in-store only discounts and time sensitive deals that can only be accessed under specific circumstances. In some cases, promotions are offered only if a consumer scans a QR code, interacts with a sales representative in person, or visits during an unusually short time, sometimes just a span of hours.

By requiring consumers to go to stores to find savings, vendors are able to drive sales and raise a sense of urgency. Retailers also find that using specific, in-person deals, like requiring shoppers to spend a certain amount in order to get some swag, motivates customers to spend more. In-person deals also create opportunities for sales associates to engage with customers directly, creating excitement and loyalty in ways that digital cannot.

A recent three-day event at Fabletics at Town Center Mall offered exclusive fall wear deals. On the final day, shoppers received a free belt bag if they spent $79 or more and 50% off the entire store. If they spent more than $99, the store would also throw in a free mini tote and bag charm. This was an in-store only deal. Customers had to speak to a sales associate to obtain the extras. 

The event had been hyped, and shoppers were counting down the days.

“I wear active wear everywhere I go, whether that be just to class or work,” said 20-year-old Molly Knepper, a Florida Atlantic University student. “I am definitely going to look into coming to the event," she said in an interview just before the sale.

But there are other, simpler reasons shoppers prefer stores. 

“I like being able to talk to someone in the store and try things on,” said Jessica Newman, 20, a Florida Atlantic University student and education major who frequents Boca Raton Town Center. 

Getting the discounts while shopping is a perk, but the social side contributes to decision making, too. Family and friends meet up to shop and enjoy doing so together. Surveillance pricing is only amplifying this by giving people a reason to get offline and make a day out of going to stores.