Wal-Mart’s “Best Price Guarantee” Reflects Multi-Channel Discomfort
Written by Evan SchumanShortly before Black Friday, the world’s largest retailer made a bold claim. Wal-Mart issued a statement that this holiday season it would offer “the Industry’s best price-match guarantee” and “the strongest price-match guarantee in the market.” Although we grant you that “best” is a highly subjective term (both in terms of “best in what way?” and “best for whom?”), the program would presumably offer much more generous terms on a virtually unlimited array of products. Sort of a Costco/Nordstrom returns policy approach to price-matching, right? Not quite.
Even though many chains for years have price-matched any legitimate rival offer—including, of course, online deals from their own chains—Wal-Mart’s new program excludes all online offerings, even those from walmart.com. How is that the industry’s best price-match program? More importantly, though, let’s explore what this online-exclusion means.
On the one hand, the idea of banning Web price comparisons has been around for years. It’s based on the assumption that different cost structures make in-store pricing not comparable to online pricing. Although that’s certainly true, it’s also as certainly irrelevant.
On the other hand, consumers today are embracing the idea of merged channels (the third stage, going beyond multi-channel and then beyond cross-channel) in a way that many retailers are still unwilling to do. They’re standing in stores, looking at their mobile devices that display Web sites.
Those consumers no longer see a distinction between mobile, Web and in-store. For them, it’s simply a matter of buying a laptop or a shirt or a garden hose. That’s all they see and, candidly, that’s all they should see. Wal-Mart needs to see the world the same way.
-Marc
December 2nd, 2010 at 8:47 am
What the author states about walking out of the store when the price match is declined is absolutely true, but it also goes one step further. A certain amount of money was spent trying to get me into that store. Why throw that investment away when you upset a customer who then regrets walking in through the B+M storefront? Appease the customer and you get return business. An electronic store (rhymes with Chest Guy) lost my business about a year ago when they declined to price match a laptop of the same features but they had worked with HP to come out with their own designation model number so they could decline price matching.
December 2nd, 2010 at 9:46 am
In the age of Social Media….you MUST deliver customer service over and beyond the expectations of your customers. Othwise its on facebook, twitter, ect. and influencing a negative brand perception to potnetially thousands of customers.
TAKE CARE OF YOUR CUSTOMER….it is the best “promotional money” you will ever spend.
December 2nd, 2010 at 11:26 am
Completely agree with the article. As a consumer I view any merchant’s brand as representing one company; not a collection of competing delivery channels. Price matching should be a brand level policy; not a channel level policy.
In today’s world, my personal delivery channel is my house’s front door. It’s not a store or a website. Those are just intermediate nuisances whose pain should be minimized. Whether my purchase originated from B&M or website, the purchase is only of value when the goods are through my front door. So my personal evaluation is “what’s the total cost (time & $) to get this item though my front door.”
If the B&M wants to compete, but is unable to price-match on exact $ cost; then at least make a counter-offer that helps value the time I save by buying in store. Maybe post a online price match formula like “we’ll match the online price + 5% per day of online shipping delay.”
December 2nd, 2010 at 4:34 pm
If all the customer was interested in was purely price then they would have stayed home and ordered it online for the cheapest price. There are a great many reasons why a person comes into a store that has nothing to do with price. One of the biggest reasons is that they want or need the product now. We are a society of now and not 3-4 days from now. If I need to buy a garden hose, it’s typically because I need one. Why would the retailer severly cut their margins if a large percentage of the time I’m going to buy it at the shelf price regardless of the lowest online price. Certainly larger ticket item’s that people plan days, weeks, or months in advance would be more susceptible to checking online pricing.
Another issue not brought out in the article is the operational issues. If I have a cart full of products at the cash register, am I going to scan every one with my phone before handing it to the cashier so that they can do a price override on every item? That would not only cost the store huge amounts of sales and margins but slow the lines and cause them much higher labor costs.
December 2nd, 2010 at 5:51 pm
Here is the issue in a nutshell:
(1) Maybe the price structure of online retailers and bricks and mortar stores are different (although even that statement is a bit misleading – is the profitability of online stores much better than briks and mortar? No it isn’t generally so its an unhelpful statement made by people who dont really think about it).
(2) either way, the consumer doesnt care. That’s the retailers problem not his.
December 6th, 2010 at 4:05 pm
Great article and good comments! It’s funny to me when a retailer won’t match their online price…especially, in the WalMart case, where there is an option to buy online and pickup in-store. So, assuming the item is not critical (as Tim indicated) and the shipping to the store or home is included in the lower price, I’ll buy that item through the cheaper channel. Retailers and consumers recognize this and both are maximizing their capital flows.
December 10th, 2010 at 4:47 pm
I think American B & M chains need to look to their Canadian counterparts, which have a much more user friendly and liberal price-match scheme. Often they will match any advertised Canadian price regardless of market and often will even match online store. Some even give you an added discount of %10 the difference.
April 17th, 2011 at 1:17 pm
They also will not match Target’s prices. Case in point. Walmart sells “Lost: Season 6” for $44.96. Target currently has it for $19.99(unadvertised special with rest of the series for $19.99). Even more ironic is it on sale this week for the same price as it 24 Season 8(which they charge $39.96 for)
The CSM wouldn’t override it because it would mean that Wally World would be losing about $25 off the items regular price!! What is even stranger is that they price matched “Mad Men: Season 4 ” on DVD for $19.99 at Target without the ad!! Needless to say I’m furious at them for not price match both items from the same store!! They claim they still need to see the competitors ad!!
How do they expect customers to price match when a lot of people don’t get the newspaper and get our ads via our cell phones? Or worse we can price check items in the store as we shop!! I think that Walmart has opened up a huge can of worms with this new price match gimmick or bait and switch thing going on!! Do they think that consumers as stupid or something??
Sorry this is long, I needed to vent about this!! This incident I wrote about happened on April 15,2011