October 7, 2014
Walmart says no to matching Publix BOGO deals
Will a new policy make Walmart shoppers think the chain is throwing up the white flag in its price battle with Publix or just offering them a better alternative to the deals they are getting from the chain? Walmart has announced it will no longer match Publix’s buy-one-get-one (BOGO) free offers in its Florida stores and instead will direct customers to use its Savings Catcher program.
Walmart’s Savings Catcher program asks customers to scan or enter a receipt number using an app. From there, Walmart matches local competitor’s print ads on the same item and then sends an eGift card for the difference.
A Walmart and Publix shopper identified by the Tampa Bay Times as Lisa Gabrelcik said she didn’t like using the Savings Catcher app and having to wait for a gift card to exchange at a later date. She also thought others, including the elderly and those without access to PCs or mobile devices, would be penalized as a result.
Others are welcoming the change. Walmart cashiers, according to the Times report, often struggle to figure out how to match the BOGO offers from Publix. Eliminating the practice, according to some, will reduce the hassle of checking out at Walmart.
Walmart spokesperson Molly Blakeman told FOX 13 in Tampa that it is possible some shoppers may spend a few pennies more in cases where there is a Publix BOGO offe, but that overall the chain’s prices are lower than the competition.
"We still are offering a very compelling ad match policy," she said.
Discussion Questions
Will the change in Walmart’s price matching policy on Publix’s BOGO offers weaken its price leader image in Florida? Will it result in a loss of business for the chain?
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We’ve discussed Walmart’s Savings Catcher in this forum before—I still think it’s a mediocre idea, perfect for people who have nothing better to do with their time. Yes, they’ll lose some sales by dropping the price matching, although a.) I understand why the price matching is hard for the cashiers to do and b.) they are going to be less expensive on a trip-by-trip basis.
That said, my mom is elderly and lives in Florida. She goes to both stores without much trouble. She’ll just buy her Publix BOGOs at Publix rather than Walmart.
Now only will Walmart lose ground, they will complicate the shopping experience which will be viewed as unfavorable by consumers. Simpler is better for consumers. Walmart first set the bar on pricing and now consumers are finding the bar set higher elsewhere. For years Walmart’s Every Day Low Price has been lower than supermarkets shelf price, but rarely lower than supermarket promotions. Consumers are starting to understand this. I don’t think Walmart will lose much in sales, but over time they will have a growing image problem.
Walmart’s Savings Catcher program is brilliant on a number of levels, and a peek on social media or a chat with Walmart customers will tell you that many shoppers get a kick out of watching their savings add up and participating in the process. There is a difference between price-matching and deal-matching. Walmart’s Savings Catcher promises, and delivers on, the former. BOGO is out of bounds.
Price-matching is fraught with potential issues, not the least of which is standing in line behind a customer who is clutching ads from competitors. I’m talking with numerous retailers who are attempting to figure out new, 21st century loyalty programs that really work, beyond the discount. There are some very exciting alternatives out there.
Living in Florida can be a many-splendored thing where many things are decided not only by prices, but also by convenience and impressionable comforts.
Walmart’s change in its price-matching policy will not weaken its price-leading image there, but a great many people prefer to shop at Publix because they prefer its milieu vs. Walmart’s and hold the perception that Publix really cares about serving them. That makes it easier for such people to say to friends and neighbors, “I shop at Publix” vs. “I shop at Walmart.”
There may be a growing perception that Walmart is not the everyday price leader in Florida and that there are better deals to be had at Publix. EDLP is a tough position to stake out and hold, particularly when it appears that better deals are elsewhere.
In terms of price-matching, however it’s done, it needs to be simple to understand, easy for the shopper to instantly acquire the match (without having to wait for a supervisor or lengthen check out) and straightforward to implement (as in, simple). Savings Catcher doesn’t seem to fit that bill.
Another triumph of efficiency over effective customer service and another reason why Publix is so strong not only in Florida but elsewhere. The easy answer for consumers who shop both (many do) is to buy the BOGO items at Publix rather than Walmart. For Publix, increasing the number of popular items on BOGO now seems to be a very clear competitive strategy.
Those who prefer Publix will shop at Publix, with or without BOGO. Those who prefer Walmart will shop at Walmart, with or without BOGO. Those who shop at both (a tip of the hat to Steve’s mother) will BOGO at Publix and price shop at Walmart.
There is a great story about Vanderbilt and the New York Central Railroad (which I will shorten considerably). NYCR got in a price war with a competing railroad. Each continued to undercut the other on freight hauling until the pricing was well below cost. Vanderbilt then started buying up the freight to be shipped along the competitor’s route and shipped it on the competitor, driving them out of business and eventually buying the railroad.
Walmart’s Saving Catcher program can hinder its low price leader image in Florida and hinder sales. While the new program certainly offers customers good deals, it also requires more work in the customer’s shopping experience. From what I have observed, customers today are seeking easier and time-efficient methods of purchasing goods. As the shopper identified in the Tampa Bay Times mentioned, the new app causes customers to wait for a gift card to exchange later. Customers would prefer to already get the item for the lower price during their initial transaction, instead of receiving the difference in an e-gift card. That would make shopping at Walmart simpler than utilizing the app.
Those who are active with their smartphones may be receptive to the new app, but as mentioned in the article, it would be complicated for the elderly or those who don’t have access to the technology required. It seems that this new program will only be useful for a selected group, instead of reaching out to the broad diversity of customers. It may be more beneficial for Walmart to research ways to improve shoppers’ experiences that uses methods that don’t require more time and effort and that can also be convenient to the various groups of people who shop.
I like the idea that Walmart, instead of matching another retailer’s strategy, will stick with its own program. The shoppers will vote with dollars and actions. Walmart shoppers can get the savings either way if they really want them.
Matching prices in the store is instant — just as though you were buying the product at a competitor’s store. Savings Catcher takes work and does not instantly save the consumer money.
Walmart has always had a very confusing price matching policy. They require the same UPC code, won’t take competitor’s coupons, they will not match ads if the competitor is located too far away, etc. I like what Woodman’s does in Wisconsin or Fareway does in Iowa: as soon as the competitor’s ads come out, they go around the store and just lower prices to match the ads. This is 2014, and while Walmart might be the price leader out in Hooterville, they are not the price leader in urban areas.
It has already been said by many. There are many people who do not have access to a way to get the price matcher from Walmart. That does not change that many people still prefer Publix. But because some prices are out of sight high, they make the added trip to Walmart for those items.
Overall, Walmart will be fine. Walmart pricing carries across all products in their stores, while BOGO in Publix may be more focused to a smaller selection of products. Overall, the lowest prices in Florida may still be Walmart.
But more importantly, Savings Catcher is a solution that fits what the younger generation wants — is things done for them to help them gain. That is why they are obsessed with technology that attaches to them, monitors their health, calories, etc.
Give Catcher a chance — especially if you are over 30 years of age.
I have difficulty with the concept of catching “savings” to be refunded later; I also have a problem with price-matching, except perhaps on large-scale items. This was part of our discussion the other day — the wisdom and efficacy of price matching. We are in a new world now regarding pricing competition. Everyone, from Walmart to Morrisons in the UK, is feeling their way, but I think they are blindly walking until they realize that a price war is not a viable forum in which to compete.
There needs to be more explanation in this subject. Many times — let me correct that, most of the time — customers are trying to get over on the cashiers with fictitious bargains or dissimilar products. These petitions are almost always timed to happen at peak shopping hours to annoy their fellow shoppers with unnecessary delays. There is almost never proof of competitive pricing presented with the consumer’s petition for price matching.
The subsequent investigation almost always discloses evidence that the competitor’s price has expired, the product is substantially inferior in quality or quantity, or are clearance items. These delays and the ensuing anxiety in front of many other customers make price matching policies a nightmare of monumental proportions. Putting a halt to this mess will make many more than just the employees happy.
Walmart’s decision could definitely alter its image in Florida. The loss leader has a lower price than so many of its competitors, but it’s clear that when taking promotions into account, it can’t always be the lowest. By deciding not to match the BOGO prices, Walmart seems to be dodging a price war and attempting to build loyalty. However, the digital nature of the Savings Catcher program makes it cater only to certain customer segments. For those who don’t use the internet or don’t have smartphones, this program is a giant miss.
At the end of the day, Walmart’s large assortment and overall very low prices keep customers coming back. Savings Catcher is probably a good move for Walmart that will incentivize future shopping trips. I’m interested in seeing the outcome.