Pink Tax: How Do You Use Your Customer Data?

Pink Tax is a fairly new phenomena and has become the buzzword. For all of you who’ve never heard of it- Pink Tax refers to that extra amount women are likely to be charged for certain products and services. It is a kind of “gender tax” where women pay higher than men for same or similar products and services. 

In a recent study by ParseHub, women in Canada pay 43% more for personal care products than men. Similarly the The New York City Department of Consumer Affairs (DCA) in a study found that women’s products cost 7 percent more than similar products for men.

Customer Data Used The Wrong Way

Analytics is important but using it for the purpose of discriminative pricing is inappropriate.

Discriminative pricing model is not something new, we have seen products and services with pricing differences before. For example booking air tickets online – the price of the tickets change based on factors such as time of your booking, day of your travel etc. It is also seen that in some cases, when you have looked at airfares on say ‘Site A’ once, then taken a few minutes to compare the cost elsewhere, and return to find the price on ‘Site A’ risen.

Today with the use of technology, businesses can tap on your data through geo location ( they can trace if you reside in an affluent area in the city),  web cookies, IP address and tracking past behaviours online to tailor the prices of products based on that data. This means your friend may buy the same product at a much lower or higher cost than what you paid.

Here are similar products online, priced differently  (ref : NYC consumer affairs)
Currently, many retailers on their ecommerce sites use this kind of technology & data to target individual shoppers with personalised offers and promotions and this same technology also allows them to determine differentiated pricing.

Analytics: Important more than ever

Analytics is changing the way we understand customers. As a digital marketer I see great potential in such technology which helps understanding your consumers even better. But using this to tweak pricing and target consumers based on gender, profile, status etc is totally unacceptable.

Instead, small business etailers can ‘up’ their game by leveraging insights gathered from customer data and being as transparent and consistent as possible online with their pricing.

Don’t you think?

Tags: analytics, big data, google analytics, pink tax