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Tuesdays are for troublemakers! Today we zoom out to see the effects of Hurricane Beryl on the auto industry, talk about personalized pricing and how Target will stop accepting paper checks.
Show Notes with links
- Hurricane Beryl's arrival as a Category 1 storm brought severe weather to southeast Texas on July 8, affecting car dealerships in the Houston area.
- Beryl caused temporary closures for seven CarMax stores and one vehicle auction location as a CarMax spokesperson stated "We temporarily closed our stores to ensure everyone's safety,"
- "Problems are the mother of invention," said Ben Keating, owner of Keating Auto Group, expressing optimism despite the disruptions as stores experienced significant damage, including building and car damage at a Toyota dealership.
- Penske Automotive Group's operations in Pharr and Austin remained open, unaffected by the storm.
- High winds and torrential rain resulted in power outages for over 2 million homes and businesses which may take another day or two to restore
- Is personalized pricing a doorway to a place no one wants to go? Personalized pricing, driven by AI, is becoming more prevalent, allowing retailers to set prices based on individual characteristics and behaviors.
- As retailers use AI to exploit personal data, adjusting prices based on factors like age, mood, and even battery life, Nikolas Guggenberger, assistant professor at the University of Houston Law Center argues that personalized pricing can lead to significant biases and inflate prices, often targeting the most vulnerable and said "Algorithmic price discrimination can basically automate usury."
- The practice is legal in the U.S. as long as it doesn't discriminate based on protected characteristics as companies like Amazon and Uber have been accused of using these tactics to maximize profits.
- For example, Uber allegedly adjusts ride prices based on a user's phone battery level, potentially charging more if the battery is low.
- Since the proof is siloed on screens of individual devices in people’s pockets, it is increasing difficult to track and address
- Target is now eliminating the character-building moment many of us have had to endure as the company announced they will no longer accept personal checks starting July 15, 2024.
- Target cited low usage as the primary reason for discontinuing checks, with only 3% of purchases made this way in 2023.
- The company assures customers that there are multiple other payment options available, including cash, debit, credit, and digital wallets.
- The decision aligns with a broader trend of declining check usage noted by the Federal Reserve.
- Personal checks are more prone to fraud and errors, contributing to Target's decision.
Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.
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