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Walmart Wins Patents To Give Algorithms More Sway Over Prices (ft.com) 72

Posted by BeauHD from the dynamic-pricing dept.
Walmart has secured patents for systems that use machine learning to forecast demand and automate pricing decisions, "pushing the U.S. retail behemoth into a debate over the use of algorithms to adjust product costs," reports the Financial Times. From the report: In January Walmart obtained a U.S. patent for a "system and method for dynamically and automatically updating item prices" to carry out markdowns in its ecommerce unit, a rapidly growing division that generated more than $150 billion in sales last year. Last week it received another patent for using machine learning to predict demand and recommend prices for goods. [...] Walmart said that both patents were "unrelated to dynamic pricing," as the patent issued in January was specific to markdowns and last week's patent was designed for merchant teams to make decisions, not the technology.

The patent granted in January involves an "end-to-end price markdown system" for ecommerce platforms such as Walmart.com based on data including predicted demand and consumers' price sensitivity. Last week's approved patent outlines ways to forecast demand and set prices at levels that will move stock over periods such as a week, a month or a quarter. "Example categories may include, for example, a food item, outdoor equipment, clothing, housewares, toys, workout equipment, vegetables, spices," according to the filing. The "demand forecasting and price recommendation" tool envisaged in the patent would incorporate sources including purchases, prices, methods of payment and customer ID, such as a passport or driver's license number. "Dynamic pricing or anything that smells like it is playing with fire," said Matt Hamory, a grocery industry consultant at AlixPartners, who cited "the goodwill that you can lose by getting customers to think or suspect or worry even slightly that you are doing things with pricing that are to your benefit and their detriment."
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Walmart Wins Patents To Give Algorithms More Sway Over Prices More

Walmart Wins Patents To Give Algorithms More Sway Over Prices

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  • Good news (Score:5, Insightful)

    by alvinrod ( 889928 ) on Thursday March 19, 2026 @12:06PM (#66049814)
    I'm sure some people will find this patent to be deeply upsetting, but Walmart having patented it hopefully ensures that no other stores will be able to use it. It's been years since I've shopped at a Walmart so them doing this doesn't affect me at all. Perhaps this patent could be granted in perpetuity so that other stores are unable to use it after the usual 14/28 year period.

    • automatically updating item prices" to carry out markdowns in its ecommerce unit

      Not bloody likely...

      • Camera sees Black family walking towards the deli-area, AI recognizes them as Black, temporarily makes fried chicken, roasted corn on the cob, and garland greens like 5 for ten dollars.
        "But, there's no stereotyping or profiling going on here, move along!"

    • I'm sure some people will find this patent to be deeply upsetting, but Walmart having patented it hopefully ensures that no other stores will be able to use it. It's been years since I've shopped at a Walmart so them doing this doesn't affect me at all. Perhaps this patent could be granted in perpetuity so that other stores are unable to use it after the usual 14/28 year period.

      I would have to imagine that if it proved lucrative they'd be licensing this tech in a heartbeat to any other store/company that a

    • Re:Good news (Score:5, Interesting)

      by Local ID10T ( 790134 ) <ID10T.L.USER@gmail.com> on Thursday March 19, 2026 @02:30PM (#66050020) Homepage

      It's been years since I've shopped at a Walmart so them doing this doesn't affect me at all.

      I lived in a town (in Missouri) where there was a gas station, a gas & bait shop, and a sporting goods store, with a Walmart 30 minutes down the highway, and a Super Walmart (bigger, also sells groceries) an hour the other direction down the highway. Walmart is commerce to a large portion of the USA. Anything that Walmart does matters to a lot of people.

      • Years ago, I was in a town a couple of hours outside of Minneapolis to support a customer trial of equipment. The town had a Walmart. In conversations with several people there, it became evident that people were driving upwards of 100 miles from various small towns and individual farms.
    • If you're an engineer at a company you usually get a bonus for getting patents so you get lots of weird and dumb little patents to get that bonus. Journalists will go hunting for those weird and dumb patents in order to come up with a story that gets some attention and headlines. That's what we've got going on here.

      These kind of patents are trivial to work around if you are implementing what's described in the patent. That's before we talk about the fact that other companies have their own patents and c

      • Patents cost money to draft and file. Unless the company has inside patent counsel or patent agent, they will need to pay outside counsel to draft it and answer through the examination. I had one proposal rejected by inside counsel because "we don't do phase locked loop patents".

        One set of motivations for patents of broad scope, is to stake a claim for possible future use, to have something to trade around standards bodies, or to offer as value to settle infringement actions against some other patent.

    • ... Walmart having patented it hopefully ensures that no other stores will be able to use it.

      Or, they'll just license the patent to their 'coopetition'. Having a hunk of license revenue may be better than having a boatload of pissed-off customers.

      Being the ONLY retailer where two friends buy the same item at the same time and are charged different prices - or where the price increases during the trip between shelf and checkout - might just lose them a lot of business. But if other stores are doing it too, then...

    • Walmart might look at this as an additional revenue stream. What makes you think that they would place customers above their shareholders?

    • It is good news ONLY if Walmart is not a monopoly... and in many locations, it absolutely is a monopoly. *shrug*

  • Seems like the same old price fixing & gouging (Score:5, Informative)

    by 2TecTom ( 311314 ) on Thursday March 19, 2026 @12:11PM (#66049820) Homepage Journal

    People have been using algorithms to manage inventory and pricing for over a century, starting with simple formulas like Economic Order Quantity that tried to balance stock levels and costs. By the mid-1900s, computers brought operations research into the mix, letting businesses forecast demand and optimize inventory more systematically. Then came barcodes and databases in the 80s and 90s, giving retailers near real-time visibility. Fast forward to the 2000s, and companies like Amazon pushed things further with dynamic pricing systems that constantly adjust based on demand, competition, and user behavior. Same basic goal as always, just massively more data and speed.

    What Walmart is doing with AI pricing isn’t a clean break from that history, but it is a step change in how aggressive and autonomous it’s become. Earlier systems followed rules; today’s AI rewrites them on the fly, reacting in real time and feeding back into itself. Prices shift, demand shifts, the model updates, and the cycle keeps going. At Walmart scale, that doesn’t just optimize shelves, it can start nudging the whole market. So while it’s still “just algorithms,” the difference now is less about the idea and more about the speed, scope, and how little human hands are actually on the wheel.

    • Re: (Score:2)

      by 2TecTom ( 311314 )

      More concerning is these transnational corporations developing thier own crypto

      Walmart is exploring the possibility of introducing a “virtual currency for use by members of an online communityin the field of NFTs”
      The retail giant is also looking at providing a means for customers to interact with the metaverse and providing financial services involving crypto
      ~ https://blockworks.com/news/wa... [blockworks.com]

    • Re: (Score:3)

      by dgatwood ( 11270 )

      Fast forward to the 2000s, and companies like Amazon pushed things further with dynamic pricing systems that constantly adjust based on demand, competition, and user behavior. Same basic goal as always, just massively more data and speed.

      The line is "user behavior". Lowering price based on demand and competition are fine. As soon as you drag user behavior in, one of two things will happen:

      • Users will figure out how to game their behavior so that you will give them a lower price.
      • You'll accidentally do something that causes illegal discrimination against someone based on a protected characteristic and find yourself fined orders of magnitude more than you gained.

      You may do both at the same time. This sort of behavior, IMO, falls under the c

    • If you do it with an app. Like it's not a murder for hire service it's assassin sharing. I mean my assassin was going to kill those people anyway since he's already there I can share him out right? All perfectly legal.

  • Title Correction: (Score:2, Interesting)

    by Sebby ( 238625 )

    Walmart Wins Patents To Give Algorithms More Sway Over Prices

    "Walmart Wins Patents To Gouge Customers of Their Money"

    ...or "U.S. Patent Office Run by Rubber Stamping Monkeys"

    There FTFY.

  • For everybody? (Score:5, Insightful)

    by SumDog ( 466607 ) on Thursday March 19, 2026 @12:17PM (#66049830) Homepage Journal
    If they're just changing the prices of everybody dynamically, I don't see why they need a patent. Every store already does that. Is this just so they can do it faster; adjusting e-ink tags on shelves throughout the day? I feel customers might actually find ways to game this system and unify to drive down prices if they can master the algorithm and utilize social media. I'd love to see this backfire and Walmart end up losing millions.

    The real danger is dynamic prices per person. Since the article is pay-walled, I'm not sure if that's mentioned. I think it should be totally illegal to charge different people different prices, based on facial recognition or anything else. Every single person should always be given the same price. This is a known problem on travel websites, where if you've visited before, they'll often only give you the prices for more expensive seats .. where if you use a different browser from a different location without being signed in, you can see the original cheaper sets you were looking at earlier haven't been sold yet.
    • Going by "Walmart said that both patents were "unrelated to dynamic pricing," as the patent issued in January was specific to markdowns" it sounds like they are going to try the argument that it's not evil dynamic pricing; it's glorious personalized savings!

      Those are the same thing arrived at by superficially different routes, obviously; but in terms of the psychology it wouldn't be at all surprising if you can convince people that being offered discounts calculated to be just big enough to get them to b

      • Re:For everybody? (Score:5, Insightful)

        by bugs2squash ( 1132591 ) on Thursday March 19, 2026 @01:17PM (#66049918)

        I'm waiting for the tech that supports having two people look at the same price tag simultaneously and see two different prices.

        Not to mention the tech that freezes the price when you take the item from the shelf so it doesn't change on the way to the register.

        • I'm waiting for the tech that supports having two people look at the same price tag simultaneously and see two different prices.

          That tech coming to a shopping cart near you, and in a grocery store devoid of price tags.

          Your taxable income and bank account balance will still be used for pricing (facial recognition before you left the parking lot, for "security" reasons). Hiring that homeless bait outside the door didn't work. Camera saw that shit too. Hello, Nedly. No, you may not have the leftover cut bait. We've talked about this.

          If you don't like it, there's always no other grocery store. Heirloom seeds were outlawed by Mons

      • Everybody loves a discount. I just marvel at furniture ads where they are slashing prices 70%. Like I believe they are losing money with 70% off. I feel sorry for the schlup that paid full price. Gouged or even gored might be more appropriate.

    • Re: (Score:1)

      by Anonymous Coward
      You don't have to speculate, patents are open to the public [justia.com].

    • Re: (Score:3)

      by tlhIngan ( 30335 )

      Is this just so they can do it faster; adjusting e-ink tags on shelves throughout the day?

      Everyone says this, but how would it be possible?

      What if 3 people are looking at the same item - which price would it show?

      What if the price changes between the time I pick the item up and when I check out? Are you expecting people to not notice?

      Because this is inviting people to take photos of the price tag when they pick up the item and compare it with the register when they check out to make sure they're paying wh

    • I'd love to see this backfire and Walmart end up losing millions.

      Pricing will be marked up or down. There's little reason for WalMart systems to sell at a loss unless that was intended (loss leader).

      IF this were to actually be a benefit to consumers, then I could see the return of 24-hour WalMarts and dynamic pricing (marked down slightly) in order to drive more traffic in the door at 10PM - 6AM. Strategies like that might also help balance out the foot traffic throughout the day.

      Any type of centrally-controlled digital price tag system has been a fever dream for those

    • Everyone already knows that that's going to end up happening... camera sees a family of color, adjusts prices of stuff they "want" (based on a racial profile, or probability that a black family wants fried chicken), maybe even going so far to inflate prices of stuff they're looking at to 'guide them' towards what it "thinks they should want".

      But, no corporation would ever do something like that, would they?

  • Walmart customers with the last names, "King", "Prince", "Duke", and "Zuckerberg" have suddenly found prices suddenly increased for them.

  • In the past, managers reacted to current demand and guessed what future demand might be
    This is an attempt to let AI do the guessing
    I guess that it won't make anything better

  • My partner is a price machine.
    They can tell you exactly what the prices are for regularly purchased goods at every single store we frequent.
    I can point to avocados and ask if thatâ(TM)s a good price or not, and they can tell me the prices of every other place they have been to.

    It appears Walmart is beginning to mess with this. But if the prices go up and fluctuate then we will simply stop shopping there. We will, in fact, start going to the small discount grocery places which have sprung up in the area

  • So... hurricane hits, Walmart algorithm foresees big uptick in demand for essentials and jacks up the price. Isn't that illegal price gouging?

    Or it's 4th of July in Myrtle Beach. Lots of visitors. So Walmart algorithm jacks up their prices. Isn't that also price gouging?

    I'd like to see how this works with laws on the books for price gouging. This just smells bad.

    • Just cause they got a patent on something like this, doesn't mean that they'll use it. Companies are constantly patenting ideas that they don't plan to use but might have value to others. Or they just want to lock down a tech that would be advantageous to a competitor.

      Walmarts entire business model is "our prices are great, all the time, for everyone" combined with "we're just around the corner". They've actually been really disciplined about their strategy, for many decades. It's the only reason they'v
    • In Florida once a Hurricane warning is in place, legally stores can't price gouge. Same with gas when everyone starts filling up to evacuate or to have a full tank for after the storm.
    • The issue is find the right to private action (your ability to sue personally) to enforce the laws. Arbitration is a thing and it is in basic condensed terms them picking their own private judge (The contract you have with the typical big bad companies usually has another line or so that there is limited discovery; that is they don't care about looking at all the facts) so the ability to enforce the price gouging has those two hurdles to name just two. Just look at gas prices in 2008 and the AG's in some st
  • Clearly they got the patent, so somebody was convinced; but I'm puzzled by what you could actually patent at this sort of scale. I could imagine an specific implementation involving some genuinely clever techniques that might be novel enough to patent; or a specific good implementation being a juicy trade secret; but at a high level "try to do some price discrimination while balancing sales rate and margin" sounds like a classic "ancient obvious thing; but we envision a system involving a computer" patent.

  • if ONWIC=true then set price to $MAXWICRATE

  • And everyone's algorithm works with the others. (Score:4, Interesting)

    by Fly Swatter ( 30498 ) on Thursday March 19, 2026 @01:44PM (#66049954) Homepage
    So that all retailers have basically the same price, bye bye price competition and hello 'hands-off price collusion'. See it's not collusion because the algorithms did it..

    How do you know it's happening already right now? When any retailer has a sale suddenly all the competitor's prices drop down to near that sale price. Amazon is the best example, any time Home Depot, Lowes, or Best Buy has their weekly sale Amazon's price is notably also lower that week to match it.

  • Airlines? (Score:3)

    by PPH ( 736903 ) on Thursday March 19, 2026 @02:48PM (#66050052)

    ... have been doing this for years.

  • As if the coupon-cutting people wouldn't notice and raise a stink and a boycott.

  • > "unrelated to dynamic pricing"
    except that both dynamic and pricing are in the patent description. Only those two things.
  • I was on the Walmart app the other day looking for batteries and they had energizer brand batteries listed cheaper than all the other ones except for their store brand so I went into the store to buy them and when I got into the store they were $3 more both in the app and shelf price. As soon as I left the store I checked the price again in the app and it was back to the cheaper version .. Tactics like that should be illegal.

  • Does anyone really believe that Walmart will use this to lower prices overall and that this is only for markdowns. I saw that more than once in the summary from Walmart. Oh, no, it's really all good!

  • Loyalty programs with personalized coupons offers dynamic and discriminatory pricing, but the use of e-ink tags that change prices based on time of day, price (fixing) markets, and closest physical proximity shopper gives them more power to charge some people more and others less. We will inevitably see the rise of professional shoppers and group buy platforms buying items on behalf of many other individual shoppers for bigger discounts and possibly attain some sort of collective buying power.
  • There are massed of prior art based on dynamically adjusting the price based on demand:

    Dynamic pricing systems and methods” (US10068241B2 [google.com])

    Variant: Event + user-behavior pricing (US20180144357A1 [google.com])
  • This along with electronic/digital price tags will let them change the prices on the fly. You better take pictures of EVERY price tag of EVERY item you buy. So when you get to the checkout if it rings higher than what was on the shelf you can show them - no it was this price. If they insist on the new price tell them you don't want the item. If you have a shopping cart full especially with a lot of perishables it will make a HUGE return cart.....

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