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Wal-Mart’s Price-Match Illusion
Beyond those exceptions, though, is a very large area for interpretation and individual associate and manager discretion and judgment. That means blanket statements from Wal-Mart (such as this gem from its news release: “So if you find a lower advertised price on an identical product, tell us and we’ll match it. Right at the register.”) are simply not true.
The problem with discretion in price matching is not merely the inconsistency from Wal-Mart to Wal-Mart and from associate to associate, but it’s the temptation to adjust those decisions to deal with economic realities. Although they never state it explicitly, won’t GMs under margin pressure during certain months be inclined to signal to associates to tighten how many discretionary product matches they should confirm? The policy of not requiring paper proof from customers is also going to give those customers less leverage to get that price, if it falls within that discretionary window.
Wal-Mart’s Colella-Lester said her chain is trying to minimize those whim-based pricing situations, mostly through training. “Since last fall, we’ve launched an extensive associate training program to ensure the policy is executed consistently across all stores,” she said.
That training includes videos and what she referred to as mini-lessons. “Lessons provided in regular store meetings include role-play cards and talking points,” Colella-Lester said.
This program is starting off with the right approach, because forcing customers to bring in crumpled pieces of paper to get a price match is a bad idea for so many reasons. Mobile devices will help with this tremendously, allowing for a screen capture to be displayed instead.
The uncertainty, though, is much more troublesome. Why not instead make the price match universal, with associates/managers performing periodic spot checks—such as phoning that competitor to verify—to keep the customers honest? If the price matches are modest, is it not better to have a solid, consistent program? What better way to signal a commitment to low prices?
Every customer whose price match is declined for what that customer may see as a whim is going to cause far more word-of-mouth damage than accepting 10 matches that aren’t necessarily legitimate.
The biggest problem, though, is the lack of matching for Web pricing. This is nothing specific to Wal-Mart; quite a few retail powerhouses have opted to exclude E-Commerce offers from price matches. This approach, we would argue, is a bad idea. E-Commerce is a rival for your customers’ dollars, and no policy is going to change that.
By having a blanket online price exception, you are strongly reinforcing the message that E-Commerce sites offer better deals. And you are then robbing yourself of the opportunity to fight that perception.
As for also excluding your own site’s pricing, that is a regrettable move for so many reasons. You have the customer in your store, he or she wants the product and is prepared to consummate the deal right here and now. Why not treat all arms of Wal-Mart as the same, the true merged-channel perspective? That’s what the customers want and what they expect. Opting to not support it, well, that’s the best gift for your online rivals you can possibly offer. It’s not like Amazon.com is some irrelevant niche player.
-Marc
April 14th, 2011 at 9:40 am
Walmart and many other retailers are not willing to match their own eCommerce sites prices. Which is surprising and beyond reason? On the same Walmart site I can order a lower price item Site 2 Store and it will be deliverted to me at the Store for pick up at a considerable expense to Walmart, but Walmart will not match the online price !!!
April 14th, 2011 at 9:55 am
It seems there are several areas in which WalMart is contradicting itself. I wonder how many ‘what if’s’ were thought through before they rolled out this program. I am not sure the old way of customers bringing in advertisements or print outs from online websites and presenting at point of purchase was ‘broken’. Now store associates are being asked to educate themselves on the competitive landscape in order to tell the customer when there is a lower priced item being advertised elsewhere and adjust accordingly. I am assuming since the product is on the conveyor belt and they are purchasing, that they are going to purchase at the advertised price. Does it make WalMart better to adjust the price? And why dont they adjust prices at a store level when they see what competitors are doing? This would reduce repetitive actions at the register. Also, the article mentions that people can show offers to the cashier via their mobile phone. Am I missing something or did WalMart not say Print circulars only? Opening up the competitive landscape to any online deal is a huge can if the customers are not responsible for producing evidence of the pricing. Can I say I saw Pantene on sale on the Target website for $4 at the Walmart register without a print-out? Or do I need to pull it up on my mobile phone? What if I dont have a smartphone? Seems like a lot of pieces missing or need to be worked out still.
April 14th, 2011 at 12:46 pm
Walmart has no interest in creating a ‘fair’ pricematch policy, oven in creating a workable policy. They are only interested in creating an advertisable policy.
“Walmart will match the price of any local competitor’s printed ad for an identical product.” is likewise a joke. What with private labeling, and exclusive model practices (Model ABC123-W only available at Walmart)the odds are very much stacked against the consumer, and Walmart knows it.
April 14th, 2011 at 1:35 pm
Most curious about how this will affect the checkout and loss prevention processes. Will the cashier require a price over-ride for each matching price? Will the store manager have to authorize each? This will slow the line speed significantly. Or will the cashier be given authority and some system over-ride price button? And how will this price substitution/over-ride affect processes and algorithms around LP?
April 14th, 2011 at 3:52 pm
Provided it has not changed, associated were authorized to price match before themselves within a percentage of the WM price. Past that percentage required a CSM (not a store manager… aka “a 100”). There SHOULD be a couple of those around the checkouts already. Of course, whether your cashier actually knows how to do it or not is another story altogether.
April 14th, 2011 at 4:21 pm
The crux of this may be the words “identical product”. Several years ago, there was a vendor selling a product to both Walmart and Costco. Walmart appeared to have the lower price on the same size bottle that was being sold by both retailers. Costco stopped carrying the vendor all together when it was discovered that Walmart’s product was 4 ounces shy of the bottle’s actual capacity. Although the bottle at Walmart was labeled with the actual fluid ounces, the size of the bottle led the consumer to believe that the Walmart price was lower on the “identical product” when it actually contained 12 less product than the Costco product. I dare say this is not the only instance of this type of deceptive packaging and I highly doubt that Walmart was deceived by the vendor.
April 14th, 2011 at 9:06 pm
A lot of strong comments but I wonder how many of the commentators have a price match policy in their business or ever tried to design one. It really is harder than you think.
April 15th, 2011 at 4:55 am
WalMart became more expensive than the competition by dropping their generics, not by raising the price on Pantene.
I assume they’ll compete for the low-price crown by bringing back Equate et al. and that this “match any price” business is PR and a means of getting shoppers back in the WalMart stores. Otherwise, they’re toast.
Then again, this is the company that brilliantly went upscale in the teeth of the Great Recession.