• by Laurie Sullivan , Staff Writer, Yesterday

Instacart said on Monday it will end the use of an AI-powered tool that allowed retailers to charge customers different prices for identical items on the grocery delivery platform.

The company tested the tool, "Eversight," that allowed Instacart to charge different prices for the same item at the same store for two weeks.

"At a time when families are working exceptionally hard to stretch every grocery dollar, those tests raised concerns, leaving some people questioning the prices they see on Instacart," the company wrote in a press release. "That’s not okay – especially for a company built on trust, transparency, and affordability."

The end of this test moves Instacart toward a more traditional retail advertising model — at least for now — where promotions rather than price manipulation drive performance.

This will have a significant impact on its Retail Media Networks (RMNs). Performance advertising relies on measurable outcomes — such as return on ad spend (ROAS) and conversion rates, which are influenced by the price a consumer sees at the moment of purchase.

Instacart's pricing policy shift and performance advertising can be affected by stability in pricing, reduced variance in conversion rates, predictable ROAS, regulatory compliance, and many other factors.

In the future, Instacart noted, it will not support any item price-testing services. 

When two families shop for the same items at the same time from the same store location on Instacart, they see the same prices, as they always should.

During a brief phone conversation with Jonathan Arena, co-founder at the startup New Generation, he suggested an alternative pricing model that retailers could use. If a consumer takes more than five minutes to check out, for example, the retailer or the brand could lower the price as an incentive rather than risk the consumer abandoning the cart, closing the browser, and merchant having to email the person with a discount code they may never use.

Instacart stated that retailers will set their own prices on Instacart, just as they had in the past. And just as retailers set different prices for items in their different brick-and-mortar store locations, retail partners may choose to vary the price of items on a store-by-store basis on Instacart as well.

Although these tests were not dynamic pricing or surveillance pricing, and never based on supply or demand, personal data, demographics, or individual shopping behavior, from consumer feedback the company now understands that these tests fell short of customer expectations.

Trust is earned through clarity and consistency. Customers should not have to second-guess the prices they are seeing.

Ending item price tests on the platform is an important step to ensure Instacart remains a place where families can confidently shop and get their groceries and everyday essentials, they need from the retailers they know and rely on.