Target online price match unlikely to curb 'showrooming'
The biggest issue is that these price-matching deals require the buyer to do the homework to get a deal. Such moves are mostly just good PR.
Target said today that it would match online pricing in all of its stores year-round -- a move deployed by many retailers this holiday season -- in a bid to stop Amazon's "showrooming" effect.
In a statement, Target said it will match pricing from Amazon.com, Walmart.com, BestBuy.com and Toysrus.com (including Babiesrus.com). In a nutshell, Target will match prices on items found cheaper elsewhere within seven days.
The move is likely to be followed by Best Buy and other retailers that deployed the price matching stunt over the holidays. However, it's unclear whether price matching really matters all that much.
Why? Target's sales for the holiday season weren't that great. For December, Target's same-store sales were flat. In fact, Target's same-store sales for December were disappointing -- relative to Wall Street estimates -- for the third consecutive year.
Jefferies analyst Daniel Binder said:
Target has disappointed three holiday seasons in a row, as it works to strike the appropriate balance between price and promotions in a world that is increasingly competitive and shifting toward e-commerce. We are concerned that Target is losing mind share with the consumer during important periods like holiday.
Meanwhile, Best Buy, another price-matching poster child, is likely to report sluggish holiday sales on Friday. Wedbush analyst Michael Pachter said in a research note:
While Best Buy matched online pricing through the holidays and ran multiple holiday promotions to drive traffic into stores, we saw only marginal improvement in conversion rates, and we expect holiday comps to be underwhelming at best.
What's going on? For starters, the lowest price may not be everything. But the biggest issue is that these price-matching deals require the buyer to do the homework to get a good deal. The onus is on you. From a branding perspective, we're generally conditioned to think Amazon is cheaper -- even if the company is collecting taxes in many states. Retail online price matching requires me to do extra work -- and probably visit a store twice.
For online price matching to really work information systems would be lined up across multiple sales channels and adjust pricing on the fly. It's telling that Target's physical store price matching also includes Target.com.
And then there's the Target fine print. According to Target's policy:
If you buy a qualifying item at a Target store then find the identical item for less in the following week's Target weekly ad or within seven days at Target.com, Amazon.com, Walmart.com, BestBuy.com, ToysRUs.com, BabiesRUs.com or in a competitor's local printed ad, we'll match the price. Price match may be requested at Guest Services prior to your purchase with proof of current lower price or by bringing in your original Target store receipt and proof of the current lower price.
- The item must be the identical item, brand name, size, weight, color, quantity and model number.
- Limit of one competitor online price match per identical item, per guest.
- Price must be valid at the time the price match is requested.
- Retail price must be shown on the website or print ad. Online prices will be validated by a Target team member.
- Competitor online items must be in stock at the time a price match is requested.
- Competitor catalogs can be matched as long as the catalog displays a current date, retail price and meets all other competitor ad match qualifications.
- If item is not available in a Target store, a rain check will not be issued to match the online price or competitor's print ad.
- We reserve the right to verify a competitor's advertised price and the availability of the item.
Those policies are just too damn complicated and most folks won't bother. That reality is one reason retailers can go year-round with price matching because the move is mostly just good PR.
Simply put, showrooming will continue until you trust physical retailers will automatically match online prices without any work on your end. Getting a retail online price match today is another form of haggling to me. The systems need to make the price-matching process invisible.
Until online price matching becomes drop-dead simple, it's likely that shoppers will browse a physical store and continue to buy online. Trust on pricing takes time to build up. And more than a decade of shopping habits will take time to break.
This story originally appeared at ZDNet's Between the Lines under the headline "Target's online price match likely useless vs. showrooming."