Is Price Matching a Mistake?
Showrooming is a bogeyman for brick and mortar retailers who operate in today’s hyper-vigilant pricing environment. One of the common responses is for stores to offer price-matching programs whereby they meet the published price of some or all competitors. Generally speaking, this tactical response has been seen as a positive for the retailers offering such a program, but is it?
In the case of Walmart, John Murphy, the chain’s former VP operations, believes that Sam Walton never would have gone for an ad match. Speaking on last weekend’s 8th and Walton Saturday Morning Meeting program, Mr. Murphy said that 30 percent of Walmart’s customers "are unbanked and a lot of them don’t speak English." Rather than try to haggle with a Walmart cashier over an advertised price of milk, that shopper is more likely to go down the street to buy a gallon of milk that is 50 cents cheaper.
Mr. Murphy argued that price matching is simply too complicated a process for customers and associates. "You’ve got to make it easy on the cashier and you’ve got to make it easy for the associates working in the store so that they are convinced that truly, you [have] the lowest prices in town on the right items. You don’t have to be on every item, but you do have to be on key items," he said.
Safeway is another chain that has decided that matching doesn’t make sense. According to the Coupons in the News site, the chain has ended its two-year "Deal Match" test in Chicago and Hawaii. The grocer offered a different spin on matches, choosing to offer it only to its Just for U rewards club members and only on specific items. About a dozen price-match items were made available on a weekly basis.
- Saturday Morning Meeting/July 20, 2013 – 8th and Walton/YouTube
- Best Buy CEO Says Chain Open for Showrooming – RetailWire
- Pulling the Plug on Price Matching: Safeway, Dominick’s Ditch "Deal Match" – Coupons in the News
Is price matching generally a positive or negative for the retailers offering it? What alternatives do you see to price matching for retailers concerned about consumers’ perceptions about its pricing?