Evan Schuman's StorefrontBacktalk

Asda obviously got burned by a badly designed promotion, but could any design save a price-match promotion today? Probably not. Even if you strip away the penny-priced clearance items, there will always be past-date or loss-leader items that bargain hunters can leverage. And with an avid crowd of bargain hunters, all it will take is a quick trip to a Web site—maybe even from a mobile phone while in the store’s aisle—to beat the system.

This is a price-database arms race, and customers will always be several steps ahead of chains. To be anything short of catastrophic, price-match promotions have to depend on increasing numbers of limitations and caveats that, ultimately, will irritate regular customers—exactly the opposite of what the promotion is supposed to do.

There’s a reason—a legally binding reason, it turns out—that Walmart had to dump its original slogan, “Always the low price. Always.” It just wasn’t possible for Walmart to always have the lowest price. Every time a competitor had a loss-leader or closeout or clearance item, that turned Walmart’s slogan into false advertising.

And that was in the days before price-comparison Web sites and instant customer price-intelligence.

There’s an irony here: Walmart recently came up with a very different sort of price-match gimmick that it’s testing in a few U.S. stores. In this case, shoppers scan their receipts from competitors into a Walmart Web site and then Walmart tells the customers how much they would have saved on certain items if the customers had shopped at Walmart.

That approach turns the Asda price-match on its head in almost every way. First, it doesn’t pay out any cash, so there’s no reason for “professional shoppers” to try to game the system. Second, it’s focused on the items where Walmart is cheaper, not where the competing store is cheaper, the way the Asda price-match worked.

Third—and maybe most important—it’s focused on people who aren’t Walmart customers, who have the receipt to show they already paid what are presumably higher prices. Those shoppers are prime candidates for a price-match program: they are already paying more somewhere else. You want to get those people into your stores. You don’t want to encourage people already shopping in your stores to spend less.

Price-match promotions used to work reasonably well as a way of luring customers. And there’s a tremendous temptation to update those price-match gimmicks to use all the price data that’s now available. As Asda discovered, though, that’s a sucker’s game. With real-time data available to customers as they stand in the aisle, customers are still going to be ahead of chains—and there’s probably no way chains can actually fix the problems. When you can’t win, it’s time to stop playing the game.