The tech company behind Woolworths smart trolleys says its carts are designed to increase impulse buying, with the capability to send personalised ads depending on a customer’s shopping habits, and even which aisle they’re in at the store.

Coles and Woolworths are both rolling out smart trolleys, with Coles announcing on Wednesday it had partnered with Instacart’s AI-enabled trolleys that can also send targeted advertising to customers as they shop.

Instacart says its trolley can make recommendations based on other items shoppers have put in their carts, offer location-based coupons and “gamified quests” where customers can participate in a treasure hunt-style shop or earn rewards for repeat visits.

Woolworths has already set up its new smart trolleys at several stores in Sydney and its outer suburbs, including at Kellyville, Windsor, Lane Cove and Parramatta.

Customers use their Everyday Rewards loyalty accounts to unlock a smart tablet that is then clipped onto a shopping trolley, allowing them to scan products as they shop.

The Woolworths trolleys do not currently store location information or feature product advertising, but smart carts overseas are already being used by supermarkets to track shoppers through stores and send personalised advertising and promotions to them.

In Europe, Finnish supermarket chain Kesko introduced smart carts made by tech company Navigine to its 98 stores, which the company said increased the average customer spend by 6 per cent.

In Australia, Woolworths partnered with Chinese retail tech company Hanshow to co-create its smart trolleys.

The company boasts online its ‘Smart Trolley Solution’ has the power to use location data as customers move through the store to offer promotions related to nearby products.

“Leveraging data and customer insights, our system presents relevant advertisements and promotions to customers as they shop,” Hanshow says on its site.

Woolworths and other retailers already use personalised advertising online that makes offers based on a customer’s previous purchase history or browsing habits.

While the grocer has not indicated it will follow others to introduce targeted ads in-store, Greens senator and digital rights spokesman David Shoebridge said the capability of smart carts to do so was troubling.

“This is incredibly intrusive technology, literally tracking your movements, your purchasing history in real-time as you move from aisle to aisle,” Senator Shoebridge said.

“In many ways it is like turning the entire supermarket into that last five metres, that gauntlet you run on your way to the check-out.”

A Woolworths spokesperson told the ABC the feedback from customers to its smart trolleys had been overwhelmingly positive.

“Customers in our trial stores have told us it’s helping them control their budget, as they can track their spend and is saving them time by scanning and bagging as they shop,” the spokesperson said.

“We are still collecting feedback from our customers and team with the view to introduce Scan&Go Trolley in more of our supermarkets nationwide, along with the ability to pay for groceries on the device.”

The company says the trolleys help customers stay within their budgets and identify total savings from purchasing products on special.

Nationals leader David Littleproud told the ABC after the public scrutiny on supermarket prices, grocers should be focused on ensuring their prices are fair.

“Woolworths may be focusing on shopping trolleys but its true priority needs to be fairness at the check out for both families and farmers,” Mr Littleproud said.

“We have previously seen that so-called promotions have proved to be false, so buyers risk being tricked into believing they are purchasing ‘specials’ when that’s not the case, whether that’s using a smart trolley or their own purchasing power.”

The Coalition has proposed an enforceable code of conduct for supermarkets, with multimillion dollar penalties when it is breached, as well as powers for the courts to break up the supermarket giants if they abuse their market power.

Woolworths and Coles executives are due to appear next week at a supermarkets inquiry being conducted by the consumer watchdog.

Electronic price stickers open the door to dynamic pricing

Smart trolleys are just one new technology being adopted globally by supermarkets.

The same company Woolworths is using for its smart trolleys also sells electronic shelf labels, digital replacements for price stickers that have become increasingly commonplace in supermarkets.

The digital labels allow supermarkets to push out price updates near-instantly, without the need for staff to manually update prices.

Woolworths, Coles and other chains in Australia have been rolling out electronic shelf labels at their stores for several years now.

The supermarkets have rejected any suggestion they may use the tech to introduce grocery ‘surge pricing’ tactics, where prices can be adjusted multiple times a day to match peak periods and customer demand.

Internationally, there are already supermarkets using electronic price tags to enable dynamic pricing.

Norwegian supermarket chain REMA 1000 has used dynamic pricing for more than a decade and at certain times of year has as many as 2,000 price changes a day on its products — or six times a day on a single product — which it says has helped to cut food waste on soon-to-expire products. 

In the United States, senators Elizabeth Warren and Bob Casey recently wrote to American grocery giant Kroger to express their fears its installation of electronic shelf labels was in preparation for a “transition to ‘dynamic pricing”, given the company had also partnered with a company that uses AI and machine learning to provide dynamic pricing technology.

Kroger responded that it would only use electronic tags to lower prices more for customers.

The Australian Competition and Consumer Commission notes surge pricing is not illegal, but businesses must not make false or misleading claims about their prices.

Senator Shoebridge said these tactics were legal “until they are not”.

“We are actually in a process of trying to make it unlawful to have dynamic pricing for concert tickets,” Senator Shoebridge said.

“If this trial goes ahead and links up with other business plans that the likes of Woolies and Coles have we may outlaw dynamic pricing for concert tickets but find we are subject to dynamic pricing for milk and bread.

“This is why we need governments to be alert and to be nimble in this space, to regulate the worst of these predatory activities away.”