Retailers Using AI

Retailers Using AI
Short Title	Retailers Using Artificial Intelligence To Make People Buy Their Products
Location	United Kingdom
Date	November 2020
Solove Harm	Decisional Interference, Surveillance
Information	Behavioral, Preference
Threat Actors	Supermarkets, Ubamarket app
Individuals
Affected	Shoppers
High Risk Groups
Tangible Harms	Financial Cost

Retailers are using AI (artificial intelligence) - software systems that can learn for themselves - to automatically predict and encourage shopper’s very specific preferences and purchases.

Description

Retailers collect people’s shopping preferences via the loyalty cards they scan at checkouts, and more and more so from their online baskets.^Surveillance

This is done to build up a profile of customers and then suggest a product before they realise it is what they wanted.

Shops can do that via, for example, Ubamarket, a UK shopping app that allows people to pay for items via their phones, make lists, and scan products for ingredients and allergens.The Ubamarket app aims to give users offers on exactly the things they want to buy.

Their AI system tracks people's behaviour patterns^Surveillance rather than their purchases, and the more one shops the more the AI knows about what kinds of products one likes. It builds a picture of how likely the person is to try a different brand, or to buy chocolate on a Saturday. And it can offer so called "hyper-personalised offers", like cheaper wine on a Friday night.

Ubamarket has deals with smaller convenience shop chains in the UK including Spar, Co-op and Budgens, stores not traditionally associated with hi-tech.

Supermarkets are interested in this, because Ubamarket app encourages users to spend more: "With the app we have found that the average contents of a basket are up 20%, and people with the app are three times more likely to return to shop in that store,"

In Germany, a Berlin start-up called SO1 is doing similar things with its AI system for retailers. It claims that nine times more people buy AI-suggested goods than those offered by traditional promotions, even when the discounts are 30% less.

Such nudging can be seen as Decisional Interference.

Breakdown

Threat: Shops nudge people to buy more by gains AI app that predicts what they want and suggest those products to them
At-Risk group: Shoppers
Harm: Decisional Interference
Secondary Consequences: Financial cost

Threat: AI based app tracks people’s shopping behavioural patterns by collecting information about their purchases
At-Risk group: Shoppers
Harm: Surveillance
Secondary Consequences: not known

Sources

https://www.bbc.com/news/technology-54522442