Holiday price matching wars: If you can’t beat ‘em, match ‘em

2 Comments | This entry was posted in Holidays, Mobile, Retail Companies

Read more Holiday '12 posts.Price matching announcements from a number of multichannel retailers are getting quite a bit of attention this holiday season from consumers and press alike. Target, Best Buy, Wal-mart and Toys R Us are just a few of the retailers making headlines with their holiday-specific price matching strategies this year.

While actual price matching guarantees have always varied significantly in the retail sector, this year there are more aggressive and extensive positions are popping up more often than ever before. Why is this practice becoming more predominant? Here are a few key trends to consider.

Don’t blame Amazon, blame mobile. NRF’s first consumer survey of the holiday season notes that nearly 53% of smartphone owners and 64% of tablet owners will use their phones and tablets to research products, look up store information, and/or make purchases this year. For the consumer driven by price and value, mobile has made comparison shopping and the hunt for discounts easier than ever. And as true in any time of year, access to these devices is making shopping online more convenient than ever before. Wal-mart has big plans to deliver on the in-store experience as well, creating an “in-store” mode for its iPhone (and soon to be Android) app so that customers can maximize their time in the store.

More retailers match their own online pricing. Many retailers still have different pricing strategies in-store versus online. As multichannel retailers continue to adopt an integrated and omnichannel focus, the transparency between channels may help evolve this aspect of price matching to become a norm for most retailers. This is a huge opportunity area to win over the consumer. In their eyes, it’s one store – one brand – one price.

If you can’t beat ‘em, match ‘em.  Most significantly this holiday, some of the largest multichannel retailers also include price matching to compete with online retailers, including Amazon. Is this an answer to showrooming for the stores? Or could it be the stores striking back? It will be fascinating to watch how this tactic will impact in-store sales. Additionally, it will be interesting to see how store associates are trained to help consumers who will be ready to talk price matching guarantees.

As pure play and multichannel retailers step into what should be a bustling holiday season for the entire industry, retailers must also think about the future of price matching beyond the holidays. Just as free shipping evolved from a promotion for online retailers around the holiday season, merchants must consider that as early as next year, price matching (to some degree) will develop into a norm for multichannel retailers.

As retailers continue to consider price matching, other consumer decision factors including convenience, customer service, and product selection must not be overlooked. While price remains the most important factor for many consumers, exclusive products and an unmatchable customer and brand experience may be the key to winning the sale in stores or online.

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  1. Posted November 15, 2012 at 12:43 pm | Permalink

    Hi Artemis
    The key here is to differentiate, not compete solely on price: “Wal-mart has big plans to deliver on the in-store experience.” Stores have some fundamental advantages that online-only merchants don’t, and until these are brought to the fore, big box retail is going to have its work cut out.

    Consumers value other things in addition to price alone. These are essentially ‘experiential’ benefits of shopping in the mall — the ability to just drop into a store when you’re passing, try on items of clothing or look at the available connections on a TV, to get advice from a friend or from a member of staff, and of course, the instant gratification that comes with taking the item away immediately. Not focusing on these benefits to concentrate on price on your competitors’ terms makes no sense.

    For many, a visit to the mall is fun and social. Whether you’re a teenager going to the mall to try on clothes with friends, a young professional getting a makeover at the cosmetics counter, or a parent and child visiting ToysRus on one of their Lego experience days, these are fun things to do which ‘connect’ consumers and retailers in an incredibly personal way. This is the future of retail: If people want to go to the mall because it is fun, they’ll go there and shop because the shopping experience makes them feel good. Unfortunately, the daily experience of shoppers falls a long way short from this ideal.

    The future of the mall doesn’t lie in price competition with online business, but with building the next generation of retail that enables consumers to experience products and services through their senses, and to connect with knowledgeable, helpful and friendly staff that will delight customers and get them coming back time and again to experience more.

  2. Posted November 21, 2012 at 10:00 am | Permalink

    Hi Charles – Thank you for your insightful comments.

    I agree with you that focusing on price alone will not prove fruitful for retailers and believe many multichannel retailers are making great strides with the balance of price, product, and experience. In addition to competitive pricing, differentiating with both product offerings and customer experience will be the keys to success for all retailers. The next generation of retail depends on it.

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