This is page 2 of:
Wal-Mart’s “Best Price Guarantee” Reflects Multi-Channel Discomfort
If customers are standing in a Wal-Mart aisle and their Android mobile devices scan a barcode and say that Amazon has this $89 item for $6 less (“do you want to click and order it now, for delivery tomorrow morning?”), why wouldn’t Wal-Mart match that and win the sale—plus the sale of a bunch of other items?
Realistically, what do you think consumers are likely to do if they choose to click “yes” and buy the item from Amazon after being told “no” to a price-match? Walking out of the store is an excellent possibility. For a few bucks, the retailer is alienating customers who are already right in its store, with their payment cards at the ready.
There’s another reason why some chains have historically resisted online price-matching. By requiring a “printed ad” from a brick-and-mortar only, the chain is presumably bypassing a ton of mom-and-pops that have much less overhead. Also, the chance of fraud is much higher, given that any good thief can create—and print—a bogus Web page making any kind of price claim.
That admittedly is a more legitimate concern, but it could be addressed through a series of simple restrictions, such as limiting price-matching to the online site of a chain with stores within 20 miles of the Wal-Mart store plus a list of perhaps the top 50 online sites. And a store manager could verify any suspicious claims.
Sure, it’s easier to simply ban online price-matching. But is that going to be a viable strategy? Doesn’t it also send an implicit message: “We here at Wal-Mart concede that many online deals—for the identical merchandise we sell—are priced so much more attractively that we can’t match it”?
Not only is that a horrible message to send, it’s rarely even true. With Wal-Mart’s massive volume buying power and relentless manufacturer negotiations, its pricing is actually among the cheapest anywhere. And when its pricing isn’t as low, it’s often so close as not to be worth the aggravation in declining the match.
With Wal-Mart’s pricing, why not truly have the best price-match deal? Wal-Mart, don’t be afraid of your shadow. It’s only walmart.com.
-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