What: Retailers' growing use of AI and customer data is coinciding with rising consumer distrust, with 85% of surveyed shoppers believing retailers use pricing tricks such as inflating prices before a sale.

Why it is important: Luxury brands and department stores that rely on pricing power face a customer base that is questioning value: rising prices without a matching rise in perceived value risk accelerating the loss of aspirational shoppers.

Retailers are spending billions on AI and customer data to turn information into revenue, yet consumers are growing more skeptical of what they are shown online. A survey by Omni Calculator found that 85% believe retailers use pricing tricks, such as raising prices before a sale or citing an original price never actually charged, and 58% think most advertised Black Friday deals are not genuine savings. 80% of Americans believe businesses have raised prices more than necessary, and only 27% trust businesses at least somewhat to use AI responsibly.

Luxury is feeling the effects first. Analyst Claire Kent notes that a handbag priced at $1000 to $1100 twenty years ago can now cost $4,000 or $5,000, and cites a Bain estimate that the sector has lost 60-70 million aspirational customers since 2022. She argues that algorithms, marketing data and celebrity-driven promotions have diminished creativity and originality, while steep price increases make consumers question the value they receive.

Technology is shifting the information advantage toward shoppers, with 59% of respondents planning to use AI chatbots for at least one Black Friday task. Regret also looms: 34% of respondents bought an unneeded Black Friday item because it was cheap.

IADS Notes: Concerns over AI-driven pricing are already pushing retailers to take public positions. Walmart's CEO pledged in an open letter not to use shoppers' personal data to set prices, as scrutiny of AI-driven pricing intensifies in Washington (Retail Week, September 2026). Canada's three largest grocers have publicly ruled out dynamic pricing, even as vendors pitch it with claimed margin gains of 2 to 3 percentage points (La Presse, September 2026). Retailers also argue that the pressure on prices does not originate with them: the NRF's chief economist contends that rising services costs are squeezing household budgets, and that thin margins and easy price comparison limit retailers' room to raise prices (Retail Insight Network, September 2026). In luxury, the customer base has narrowed. Bain figures cited by JLL show luxury consumers falling from roughly 400 million in 2022 to 330 million in 2025, while clients spending at least €20,000 a year now generate 46% of sales (Forbes, September 2026). On the information advantage, AI shopping assistants are expected to take over purchase decisions, which threatens marketplaces' advertising and commission profits (a16z, September 2026).

Retailers know more now than ever, but consumers trust them less