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Transcript

00:00:01
>> A behind the scenes war for your wallet, I'm Reuters' Jeffrey Dastin. Behind every single price you see when shopping online is in fact an algorithm. Retail has changed dramatically in the past decade. It's not the same experience where you go to a store, you see a price, and if you go back to the store later in the same day, the same price will be there.
00:00:22
And the company that has emerged as dominate in the most interesting and complicated pricing maneuvers is Amazon. Reuters has learned new evidence suggesting how Amazon is using this algorithm, this technology to its advantage. To start with, Amazon has computer programs that scavenge the Internet to fetch rivals' prices and make sure that Amazon's own algorithms are producing the best result.
00:00:50
These colloquially are called bots. In fact, Amazon pioneered the use of bots in retail. Today, third parties help less savvy retailers track rivals' prices. And to make sure they're not caught, they do quite complicated things. They make their bots seem human. They make their bots type in mistakes and errors as if they were a human typing in mistakes and errors.
00:01:13
Amazon is investing in blocking others from getting Amazon's information. In fact, the number of bots crawling around Amazon's website is staggering. Up to 80% of the clicks that are on product listings are coming from bots. So Amazon made one change that cut off Walmart's bots. In February, it made another change that cut off the bots of a subsidiary of Walmart called Jet.com.
00:01:38
And at least in the first case took weeks for Walmart to come up with a work around. It underscores why Amazon in general has been able to dominate the retail environment. It's not just that the company offers free shipping. It's not just that the company has ambitious moves into TV programming or its Alexa devices.
00:02:02
But it is in fact its technological prowess, its ability to innovate in areas like pricing algorithms and bots that is making it very difficult for rivals to keep up.