Do Price Comparison Ads Work?
In a RetailWire poll in January, 68 percent of respondents said consumers were somewhat (58 percent) or highly skeptical (10 percent) of the claims made in price comparison ads. Skeptical or not, it would seem that at least in the case of Walmart, price comparison ads work.
Despite posting lower-than-expected results for its first quarter, Bill Simon, president of Walmart U.S., reported the company had gained share in "food, consumables and health and wellness/OTC" for the 13-weeks ending April 27.
Complaints coming from a host of grocery chains and others who suggest Walmart’s price claims range from misleading to outright lies also suggests the campaign, being run in 70 markets across the U.S., is working. Despite the complaints, no attorney generals have launched formal investigations into the matter, according to a report by Advertising Age.
Stephen Quinn, chief marketing officer at Walmart, defended the company’s approach. He said the company does its comparison using a real consumer’s shopping list, scanning the exact items bought at a competitor.
He also told Ad Age that Walmart is now targeting consumers who are enrolled in gas reward programs as part of its comparisons. He said the programs have been effective for retailers that use them, but Walmart is out to show them the rewards don’t pay off.
"We go through the math: How big’s your gas tank? Let’s say you’ve got 20 of those gallons and you save how much — 10¢ per gallon? And then they’ve overpaid for their groceries by about $30," Mr. Quinn told Ad Age. "That’s an actual example. The look on the woman’s face — you could not pay an actor to have pulled off that look."
- Walmart Gets a Boost From Local Price-Comparison Ads – Advertising Age (tiered sub.)
- Is Walmart Right to Shrug Off Its Tougher Than Expected Quarter? – RetailWire
- Rivals: Walmart Plays Loose With the Truth – RetailWire
- Is Publix Right to Take It to Walmart in Comparison Ads? – RetailWire
Do price comparison ads work in most cases or is Walmart an exception? If you’re a competitor, how do you counter what Walmart is doing?