Match Game: Target Set to Match Amazon Pricing Year Round

8 Jan

Brick and mortar retailers are facing increased pressure from their online counterparts. More and more consumers are “showrooming”, the process of going to a physical store, touching and testing a product, then using their smartphones and some apps to find the lowest price available to purchase the product. Many times the lowest price is at on-line retailer. Not only have the brick and mortar stores lost sales, but they have to still pay all the expenses which go along with having a physical location.

Target has apparently had enough of this situation and is aiming directly at one of the on-line “big boys” in battle: Amazon. According to Target’s CEO, Gregg Steinhafel, “We know that our guests often compare prices online.” While going directly at on-line retailers, like Amazon, Target is also going after other brick and mortar companies as well by matching their on-line prices. Target will be matching prices from Amazon.com, BestBuy.com, Toysrus.com and Walmart.com.

The rules for the price match work when “a customer buys a qualifying item at Target and then finds an identical item for less in the following week’s Target circular or within seven days … Target will match the price.” Of course there are other specific rules a customer must follow, and this is where Target will be able to squeeze out of some of the price matches.

According to Target’s rules the “price guarantee states that the price-matched item must be the identical item, brand name, size, weight, color, quantity — and even model number.” The last part is where Target gets the out. There are times when an identical item is made but a retailer may have a different model number than another. This will leave Target a out by telling a customer the product they purchased is not the “exact” same as the one they found on-line.

The frustrated customer can then either try to return the item to Target, which is notorious for being very picky on returns and will store customer information with a third party for possible denial of returns in the future. Or the customer can keep the product, choose to not shop or greatly reduce their shopping at Target and use them as a showroom.

Of course Target could be very customer friendly and match the prices of products which are clearly the same but have the technical, purposefully changed model number. This would be very good customer service, which is another reason customers didn’t buy from a brick and mortar store. From the Market Watch article:

Among shoppers who say they engage in showrooming, 40% say that they actually never intended to shop online, but did so after experiencing poor customer service and support in stores, according to a recent survey by the Kellogg School of Management. Of the 1,900 shoppers surveyed, 59% say they received poor or average service in stores where they recently shopped.

So while matching prices is a big step, if a retailer, on-line or not, doesn’t treat its customers well, they will go elsewhere. Some additional food for thought and the retail business gets even more competitive in the coming year.

 

Source –
Target vows to match Amazon’s prices – Market Watch

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: