Target's price matching: Revolutionary or redundant?

Every argument has two sides, right? Well, the latest twist to the retail industry's price-matching saga is no different, and camps are forming up on both sides of the pro and con divide.

The latest chapter in the saga is Target and its recent announcement that its price-matching policy would move from a holiday season bonus to a year-long price-match extravaganza. Some say it's the start of a retail revolution; others call it a mistake that will do little to make even a ripple in the retail waters.

With the new policy, Target will combine its previous price adjustment and competitor ad match policies into one — only now that also includes select online retailers. If a shopper buys a qualifying item at a Target store and then finds the identical item for less in the following week's Target circular or within seven days on Target.com, Amazon.com, Walmart.com, Bestbuy.com or Toysrus.com or in a local competitor's printed ad, Target will match the price.

Let's start with the pros: Tom Nawara, VP at digital marketing firm Acquity Group, feels that Target's move is only the beginning in what will be a string of other brick-and-mortar retailers joining the battle against e-commerce.

"It's important for [Target] to showcase to their customers that they don't need to be shopping online or elsewhere," Nawara said, noting that the press-heavy manner in which Target made the announcement was of benefit in itself. "This becomes a baseline as more retailers sign on to match this," he said.


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But Nawara admits that since much of Target's product line is made up of its own branded items, price-matching is useless in some cases.

"Target has their own label products, and price match doesn't affect that," Nawara said.

Still, when it comes to commoditized products, Nawara said the policy will be effective. "It helps brick-and-mortar retailers with showrooming ... If they can get it in the customers' minds that they can immediately get something in-store, that will save retailers a lot of sales."

Beyond simply battling showrooming, the trend toward retailers matching online prices also is vital for the evolution of the industry in the face of new technology, Nawara said. "I think as the lines between physical and digital continue to blur and move from single to multi- to omnichannel retail, this is something that retailers will need to be."

Now on to the other side of the argument — the price-matching cons: With Target's sales in 2012 close to $79 billion, largely from in-store activity, what led them to permanently implement price-matching?

According to Matt Ong, a retail analyst on the website Nerd Wallet, Target's price match is just another escalation in the price-matching war between Amazon, Walmart and Best Buy, but it's too soon to deem the policy revolutionary or as setting a new industry standard.

"Price-matching, Target's new policy included, is full of restrictions and exclusions that are often complicated and difficult to understand," Ong said. "Two key barriers for widespread shopper acceptance in Target's policy are the required visit to the customer service desk and the lack of easily comparable items. Because Target has so many exclusive items, hundreds of products are excluded from price match."

Ong also explained how most price-matching policies are riddled with red tape, with the vast majority of shoppers likely deeming them too frustrating and time consuming to adopt. Target's price match isn't exactly groundbreaking, either, Ong said, as Amazon, Walmart, Best Buy and Toys "R" Us all have some versions of price-matching currently available.

"Target might satisfy the hungriest deal seekers with price match, but the company probably won't significantly cut into Amazon or Walmart's market share," he said.

"While the retail world will wait for more data before judging Target's price match, there is considerable industry doubt as to how much Target's policy will impact the retail industry as a whole," Ong said. "The implications of Target's price match will most likely be determined by how successful the company is at the customer service desk in keeping the price matching process smooth and easy and satisfying consumers."

Read more about multichannel retail.

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User Comments – Give us your opinion!
  • Tim McCulloch
    37784371
    The poor quality of products in general has me shopping at brick and mortar for the following reasons. Recently I bought a product through Amazon that was defective Amazon did credit my purchase without a problem however it cost me $11.56 in postage to return it. That I am out of pocket. ( Will supply supporting invoices if needed) I bought a product at Sears it to was defective. They also refunded my purchase price no postage out of pocket. Although not compensated for my time, gas or my quality control efforts. I use to purchase a great deal on line, mail in rebates became a joke in fact now if the product has a mail in rebate I will not purchase it EVER. My product purchases online are few. So if Target which is local although I seldom go here will match online pricing they will see more of me. Tim McCulloch Danbury CT
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