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Summer vacation season is here, but it may be the last time Americans can travel affordably by planeespecially if Delta has its way. As the worlds largest airline by annual revenue and the second-largest by passengers carried, Delta is a leader in the industry. Thats what makes its plans to use AI for ticket pricing so concerning. According to Delta President Glen Hauenstein, about one in five tickets the airline sells by years end will be priced by AI, up from just 3% today. Deltas long-term goal is to price all tickets this way. This is a full reengineering of how we price and how we will be pricing in the future, Hauenstein told investors in November 2024. While this may spell amazingly favorable unit revenues for the airline, its bad news for passengersmany of whom worry that price gouging will soon eclipse any notion of price personalization. The practice of dynamic pricing is certainly not new in the airline industry, says Kerry Tan, professor of economics at Loyola University Maryland. But with better data and evolving tech, he says, the increase in the usage of AI to price their flights raises important questions. Certainly Delta, as with any other company, is profit-driven, and stands to gain from this by better matching consumers willingness to pay to the price they pay for a flight. The fear is that Deltas size and influence will prompt othersboth airlines and companies in unrelated sectorsto follow suit. As an economist, we assume that companies are profit maximizers, and so in a way I see this as companies really making a push towards that objective of profit maximization, Tan says. But it also highlights how firms are increasingly willing to squeeze consumers for every penny. Thats why companies like Disney can implement variable pricing for perks like Lightning Lane passes, or why Las Vegas casinos continue to raise resort fees. Post-pandemic, the consumer environment has grown more hostile, from ubiquitous tipping prompts to ever-higher surcharges. Tan points to sports franchises pricing tickets dynamically depending on the quality of their opponentfor instance, Manchester United charging more when facing rivals like Liverpool than lesser-known teams like Everton. And its not just flights or football. I think certainly where possible companies are going to try to employ AI, Tan says. While grocery pricing might seem less vulnerable, he notes early signs of change. Some European chains already use digital shelf tags that update in real timelowering prices to reduce food waste but potentially able to raise them when demand spikes or a tracked customer walks in. Still, he adds, AI pricing makes more economic sense for big-ticket items like airfare than everyday goods like milk. Tim Quigley, a management professor at the University of Georgia, agrees, and sees how easily this kind of technology could spread. If they know theres an ad and a bunch of people in a city searching for a piece of hardware at Best Buy, maybe the price goes up, he says. Its those sorts of things AI can do without human intervention. Hotels may be next. What youre willing to pay to stay at a Marriott or a Hilton or some other hotel could be vastly different than my willingness to pay, Tan says. And if they can tap into that difference and charge you closer to what your willingness to pay is, theyre going to extract a lot more profits. Quigley warns this trend could lead to a miserable existence for consumers. This creeps in further into our lives with us being silent about it, he says. So I appreciate you reaching out and other journalists that have written about this issue and getting it to the forefront. For Quigley, the solution starts with protecting personal data. Companies are using this data in ways that you and I could have never imagined, he says. Maybe we ought to put some basic protections in place to say the customer, the individual[we] own our data.
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E-Commerce
Years ago, I spent a lot of time making the case for why IT mattered in large enterprises. Its fair to say the landscape has changeddramatically. Where I once had to argue for ITs strategic importance, I now find myself doing the oppositepushing back on the exuberant view that technology alone can fix everything from poorly designed processes to unclear roles and responsibilities. After decades of serving as essentialbut often backgroundenablers of enterprise strategy, technologists and our alphabet soup of leadership titles (CIOs, CDTOs, CDOs, CTOs) are now at the center of business transformation. In more than 30 years in this industry, I’ve never witnessed IT play such a central role in shaping business dynamics. With the tailwind of generative AI and automated code completion, technology teams are now leading what can only be described as “business as unusual”creating previously unimaginable products, services, business models, customer and partner relationships, and employee experiences. Today, tech strategy is business strategy. The Great Unbundling Begins The traditional way we think about enterprise software is being upended. Suddenly, it’s both cool and affordable to build genuinely useful things. For decades, CIOs were forced to manage constant trade-offs: lower total cost of ownership versus future-proofing, slick user interfaces versus seamless integration, best-of-breed solutions versus end-to-end platforms, on-premises versus cloud. The market subsequently converged to the point where most companies now run virtually identical application stacks. And yet, despite spending tens of millions on carefully crafted user interfaces, most employees still dislike using the enterprise software we provide. They use it because they must, not because they want to. At their core, most enterprise software platforms arent so different from the Excel spreadsheets my brother uses to run his small businessthey just come with multimillion-dollar interfaces layered on top. Whether its HR systems, data platforms, or CRMs, the underlying logic often mirrors the same basic workflows and decision trees. What sets them apart isnt complexityits scale, integration capability, and the stakes involved. To put it more bluntly, all of us are spending enormous sums on the equivalent of a car that boasts luxury exterior finishes but moves you along with the horsepower of a Yugo GV. Regardless of how nice the outside looks, the engine is what actually delivers impact and value. The AI-Powered Reconstruction The emergence of agentic AI is fundamentally disrupting how we evaluate enterprise software as an industry. With novel AI frameworks like Model Context Protocol (MCP) and Agent-to-Agent (ATA) protocols, we’re starting to see a future where user interfaces can be disaggregated from the underlying data itself. If AI-based tool calling delivers on its promise, theres no reason someone shouldnt be able to change an address, retrieve a paystub, modify a customer order, reset a password, or increase a purchase orderall from the same pane of glass or GenAI prompt bar. The ability to design this unified interface finally enables meaningful IT differentiation among companies. Until now, enterprise customers had no choice but to purchase software for virtually everything because developing and maintaining applications with exceptional UI, robust databases, and enterprise-grade security was prohibitively costly. With AI, the economics have shifted dramaticallythe cost of building something uniquely tailored to our business is plummeting as software learns to write, maintain, and improve itself. In my field, every pharmaceutical company has historically relied on the same suite of enterprise applications, making differentiation nearly impossible. This raises a fundamental question, especially at this moment of accelerating AI innovation: Should we continue purchasing the costly applications everyone else uses, or should we start building solutions that give us an edge? AI First By adopting an AI-first approach, my company has developed an enterprise software catalog that outperformsand costs less thananything available for purchase, solving the age-old challenge of data discovery across our corporate systems. Throughout our organization, even in processes far removed from laboratory work, we’re starting to see how bespoke tools without traditional user interfaces can execute tasks in seconds that previously required 30+ minutes across multiple systems, accelerating how we discover and develop lifesaving medicines. I’m not suggesting companies should build custom ERP systems or replace every piece of software. Rather, AI and agentic frameworks give us the freedom to assess where real value is being createdwhich is typically closer to the end user. We can now selectively build applications that directly improve our competitive advantage while continuing to rely on proven solutions for core operational functions. The Tech Is Changing, and So Is the Talent With this newfound ability to build transformative solutions, the domain of configuring software, while still crucial, remains a necessary but insufficient skill set. The way we think about talent is fundamentally changing. By becoming more comfortable building technologynot just buying or configuring itmy organization has doubled in size while significantly reducing its cost to the company. We’re still hungry for more people with the right skills. Fortunately, were seeing the next generation of undergraduate and graduate programs blend AI, computer and life sciences, and computational drug discovery and development. The twin torrent of advances in AI and biomedicine is creating rewarding career paths for emerging tech talentoffering purpose, future-shaping potential, and the opportunity to make a uniquely human impact. Its a uniquely exciting time to be a technologist in life sciences. In five years, the work we do to benefit patientsthe applications and software we create to speed the discovery and delivery of new medicineswill be almost unrecognizable. While change at this pace brings inevitable turbulence, it also expands the role of tech leaders from enablers to architects of enterprise strategy. The opportunity isnt just to keep upits to help shape what comes next.
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E-Commerce
For more than a century, the U.S. government has tried to bring more transparency to food labels. It started in 1906, when the Pure Food and Drug Act cracked down on mislabeled ingredients and false health claims. Since then, regulators have required more disclosurescalories, trans fats, added sugarsall in the name of public health. But if the goal was to change how Americans eat, the results remain hard to swallow. Today, nutrition labels are more accurate and comprehensive than ever, yet 74% of adults in the U.S. are still overweight. There are many reasons for this discrepancyhighly processed foods are addictive; healthy options are often more expensive. Some have argued that nutrition labels are “a wasteful distraction in the fight against obesity.” But many studies have shown that nutrition labels have their own role to play in nudging consumers to make healthier decisionswith two very big caveats. One: You must care enough to turn over the packaging and study the nutrition info box on the back. Two: You must know enough about nutrition to interpret what’s written in that box. [Photo: Good Food Collective] The Good Food Collective, launching today, wants to tackle both problems at once. The mission of this coalition of more than 25 food brands, organizations, and nutrition experts is to advocate for greater transparency in the food industry. Its first goal is to push for a front-of-package nutrition label thats visible at a glance and easy to understand and interpretqualities that can benefit both consumers and food manufacturers. It could change how Americans consume food, and it could change the way companies produce it, too. Unlike nutrition labels on the back of packaging, a front-of-package label can catch consumers attention during that split-second decision-making moment in the store. The coalition’s design, by branding agency Interact, highlights when a product is high in added sugars, sodium, and saturated fats. It comes with a QR code framed inside a magnifying glass thats designed to educate people about nutrition, whether at the supermarket or back home. “We’re all working on the same problem, which is undoing years of irresponsible food marketing,” says founding member and GoodPop CEO Daniel Goetz. [Image: courtesy Good Food Collective] The FDA seal of approval The Good Food Collective isn’t operating in a vacuum. On January 14 of this yearjust six days before Donald Trump took officethe Food and Drug Administration proposed requiring a front-of-package (FOP) nutrition label for most packaged foods. By then, the FDA had designed three versions: a simple, text-based label; a traffic light-style, color-coded label; and a black-and-white percent Daily Value label. After surveying 10,000 Americans, the agency found that the latter performed best in helping consumers identify healthier food options. The design was then put to a wider test as part of a public comment period that closed just last week, on July 15. Judging from the docket, the FDA received close to 12,000 comments. Some food manufacturers stated their concern that a label would incur financial costs related to redesigning and repackaging. Others noted that percent daily values like “low” or “high” could be misunderstood without contextual education. The Good Food Collective submitted its design as part of the comment as well. The FDA has yet to review all the comments, but a lot has changed under the Trump administration. In his capacity as secretary of Health and Human Services, Robert F. Kennedy Jr. fired 3,500 employees at the FDA, or 20% of its workforce (the FDA did not respond to a request for comment). The Consumer Brands Association (whose members include General Mills, PepsiCo, Unilever, Nestlé, Procter & Gamble, and others) sponsored a study pushing back against front-of-package label efficacy. And Trump introduced a regulatory freeze thats put many pending rulesincluding the FOP labelon hold. If the FDA chooses to go ahead with the proposal, it will publish a final rule in the Federal Register. At that point, manufacturers would have three years to add the new labels, while smaller food manufacturers would have four years. Nutrition labels around the world If the FDA decides to implement a front-of-package label, it would follow in the footsteps of about 40 other countries. Some labeling, like in Australia, New Zealand, and the U.K., is voluntary. In Mexico, Chile, Argentina, and Brazil, its mandatory. Canada is in the process of implementing front-of-package labels by 2026 for products containing high sodium, sugar, and saturated fat. Singapore is due to extend its label from beverages to foods in 2027. Japan is currently piloting a front-of-package system. Multiple review and real-world trials have shown that front-of-package labels have improved customers’ understanding of nutritional quality and, in the case of New Zealand, the Netherlands, and Chile, even prompted manufacturers to reformulate products. After Chiles Food Labeling and Advertising law went into effect, the percentage of products qualifying for a high-in-sugar label fell from 80% to 60%, while high-sodium products dropped from 74% to 27%. It’s important to note that labels are more likely to succeed if they are accompanied by widespread consumer education campaigns to help the public understand how to interpret the labels. The look of the labels matters, too. Simple designs like traffic lights (U.K.), star ratings (Australia and New Zealand), or clear warning symbols (Mexico) have proven more effective than complex or purely numerical labels. [Photo: courtesy Good Food Collective] Designing a front-of-package label The label that GFC is proposing is a direct response to the one proposed by the FDA. At first glance, it doesn’t even look that different. Like the FDA’s version, its black and white and mostly laid out in the same waya wise move that piggybacks on the agencys research. But there are some key differences, the biggest being the way information is presented. The FDA’s version gives a breakdown of all key nutrients and whether they are high, low, or medium. The GFC label highlights only nutrients that qualify as high in content. One of the comments submitted to the FDA, by the National Milk Producers Federation, objected to the proposal for a front-of-package label, stating it provides an incomplete assessment of a foods nutritional profile by focusing only on the bad. But members of the Good Food Collective argue that positives like “organic” or “high in protein” tend to cloud people’s judgment. For example, a product may be high in protein but also high in saturated fat. By focusing on high in nutrients, the GFC label makes it harder to avoid the mountain of fat or sodium lurking in that ingredient list. To further draw attention to the label, the Interact team added a visual nugget in the form of two widely recognizable symbols: the QR code and the magnifying glass. Dan Gladden, Interacts executive creative director, calls these “memory structures” because the average American is already familiar with them. The QR code is now ubiquitous. The magnifying glass is a clear invitation to find out more. Interestingly, Interact took cues from the FDA and shied away from using colors in favor of a monochromatic design. According to Gladden, whenever people see a red label, as they do on a bag of crisps in the U.K. (what Americans call potato chips), their inner child might kick in and reach for what they cant have. “Americans like their freedom, and don’t like to be told what to do,” Gladden says. Studies have shown that people browsing in a supermarket make a decision in as little as three to five seconds. A black-and-white graphic that calls out high in ingredients is easier to interpret than one that, for example, requires parsing out the meaning of a yellow symbol and what about that particular product makes it yellow. [Photo: courtesy Good Food Collective] Rising tides lift all boats At the time of this writing, the Good Food Collective is a coalition of 26, including founding members GoodPop, LesserEvil, Quinn, and Interact, and brands that joined later, including Little Sesame, Dr. Praegers, Rudis Bakery, and Sweet Nothings. All brands bill themselves as healthy, which of course could mean that a front-of-package label may translate into higher sales, but it’s hard to be cynical when the outcome could benefit consumers as well. In any case, Tanner Smith, director of retail sales at Little Sesame, isn’t convinced a front-of-package label will lead to increased revenue. “Hummus is a cleaner category anyway, he told me, referring to Little Sesames core offering. My mind goes to chips, where brands can put a lot of additives. Tanner believes the GFC label, the QR code in particular, provides a huge opportunity to educate consumers on making better food choices. “People are more aware of ingredients so I really do hope it does have impact,” he says. Caitlin Mack, VP of marketing at LesserEvil, is also hopeful it will help brands reformulate their ingredients. “Ultimately, if it’s so in your face, then you’re going to want to make sure it’s coming across as something that consumers are going to want to be consuming,” she says. Whether or not the FDA takes the GFCs recommendation, the mere fact that the coalition exists brings a glimmer of hope for the food industry. Many of these brands have been working toward the same goal for yearsclean ingredients, honest marketingbut by banding together, they hope to prove that rising tides lift all boats. “What we’re trying to do is, for the first time, be food companies that actually want to see progress on behalf of consumers, says Goetz. That’s the spirit of the Good Food Collective.”
Category:
E-Commerce
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