Mobile price comparison is a growing challenge for today’s retailers. According to PwC research, one in four shoppers in the US use price comparison websites to check out products they plan to buy. Price matching targets price-sensitive customers who are highly responsive to minor changes in pricing.
What is Price Matching?
Price matching is when retailers promise their customers to match or beat the price if they can find an identical product at a cheaper price in a competitor’s store.
When customers produce proof of a lower price to the store that accepts price matching, they adjust the price accordingly to win over customers.
Price matching is an ethical retail practice (in physical and online stores) that applies to identical products with no particular USP. It is common in retail categories such as home decor, electronics, and appliances, where competition between stores is high.
Broad Price Matching Rules Retailers Follow
Here are some standard price-matching rules followed by retailers using this strategy:
- The items for price match have to be identical to the items included in the competitor’s sale, right down to the brand name, size, quantity, color, weight, and model number
- Customers have to get along the proof of competitors’ lower prices that they wish to price-match
- The product is to be shipped and sold by the retailer and not third-party sellers
- Price comparison is restricted to new products that are available in stock
- Price matching after purchase is possible if done within the specified period mentioned by the retailer
Types of Price Matching
Retailers who practice price matching strategy alter the prices of goods primarily through competitor price monitoring. There are three approaches to price matching:
Standard Price Matching
In standard price matching, retailers set the same price for a product as competitors.
Price Protection
Also known as retroactive price matching, this type of price matching occurs when a retailer offers a discount on a product after a customer makes a purchase (say, a month). In this case, the price difference is refunded to the customer on producing the proof of purchase.
Price Beating
In price beating, retailers monitor competitor prices in real-time and price their products lower than other retailers.
Examples of Retailers Offering Price Matching
Motivating price-conscious consumers to stay loyal requires far more effort than offering discounts. To differentiate effectively, retailers are topping up low prices with convenience, free shipping, excellent customer service, or competitive pricing strategies such as price matching.
Walmart was a trendsetter in successfully executing the price-matching strategy in the US. In 2014, the store introduced a unique price-matching tool called ‘Savings Catcher’ integrated into the company’s mobile app. This tool became an instant hit with the store’s consumers. It allowed customers to scan their Walmart receipts to search competitor prices automatically.
Walmart’s Price Match Guarantee
After successfully running price matching in its stores with the ‘Savings Catcher’ tool for five years, Walmart discontinued this feature from its app in 2019. Meanwhile, the retail chain had achieved the goal of instilling confidence in its customers that they’d always receive the best deal at their store.
- Walmart price matches with Online sites where the current advertised price of a branded product is lower than Walmart’s selling price
- Price match period: Within 7 days
- Accepted proof: Add the link to the lower price site in the “Coupon Codes and Special Instructions” field during checkout or share the same via e-mail with the customer services expert
- Limitations: Pricing offered on in-store-only purchases or promotional prices of competitors is not accepted
- Highlight: Price matches against top online competitors and reinforces Walmart‘s “everyday low price” guarantee
Price Match Guarantee at Target
Target’s price match guarantee applies to qualifying items bought at Target’s physical stores, its online store, selected online competitors, or competitors featuring lower prices in local print ads.
- Target price matches with: The online sites of Amazon, Apple, Barnes and Noble, BestBuy, CVS, Chewy, Costco, DicksSportingGoods, GameStop, HomeDepot, JCPenney, Kmart, Kohl, Lowes, Macy’s, Newegg, Office Depot, PetSmart, Petco, SamsClub, Sears, Sephora, Staples, Ulta, Walgreens, Walmart, and Wayfair.
- Price match period: Within 14 days
- Accepted proof: The printed or digital version of the ad is accepted in stores.
Customers are expected to call their customer service number for Target.com purchases.
Original receipts or packing slips are required for price adjustments after the purchase.
- Limitations: Online search engine prices are not accepted.
The price match excludes clearance items, storewide or category promotions, offers advertised as a percentage or dollar off, closeout items, liquidation sales, non-branded items, damaged, used, open package, refurbished, or rent/lease-to-own items, and prices displayed on a website after you log in.
- Highlight: If the product is out of stock, the company offers a rain check for 30-45 days at the same day’s sale price if it is restocked.
JCPenny’s Lowest Price Match Guarantee
From price conditioning consumers with discounts to experimenting with the ‘Fair and Square Everyday pricing’ strategy, JCPenney’s price strategy includes a price match guarantee.
- JCPenney price matches with: All stores having a physical and online presence, including Amazon.
- Price match period: Within 14 days
- Accepted proof: A qualifying lower price in an online or printed advertisement.
- Limitations: Unadvertised in-store prices are not considered.
Excludes third-party marketplace sellers and auction sites.
Price match cannot be applied on clearance pricing and online-only coupons.
- Highlight: Price match guarantee is applicable 365 days a year, including Black Friday.
Lowe’s Lowest Price Guarantee
Customers must contact a member in-store or chat on the site to request a price match.
- Lowe’s price matches with: Any physical or e-commerce site, such as Amazon, whose advertised lowest price should include shipping charges.
No third-party marketplace sellers and auction sites.
- Price match period: Within 30 days
- Accepted proof: A qualifying lower price in an online or printed advertisement. Unadvertised in-store prices are not considered.
- Limitation: The item must be in stock at Lowes and with the competitor.
Other discounts cannot be combined with the price match.
Brands like Dacor, ICON, Fisher & Paykel, Monogram, SMEG, Liebherr, Weber, Kichler, and Nest do not qualify for the price match.
- Highlight: If an item is purchased before a price drop, Lowe’s adjusts the price on request on producing the receipt.
Staples’ In-Store Price Match Guarantee
For a consumer looking for office supplies and electronics, Staples follows an aggressive price match strategy.
- Staples price matches with: Amazon (excluding marketplace sellers) and any retailer who sells Staple products in their online or offline stores.
- Price match period: Within 14 days
- Accepted proof: A qualifying lower price for an item with the identical model number and US warranty.
- Limitations: Price Match is only available for purchases made in a Staples store.
Customers can only price-match one item per transaction.
Coupons and BOGO offers do not qualify for price match.
- Highlight: If the competitor’s order includes free shipping, Staples price matches the same amount without charging extra on shipping.
Price Match Guarantee of Best Buy
BestBuy offers both a standard and retroactive price match guarantee, reinforcing customers’ confidence that they are getting the best possible deal on electronics. Best Buy was the first retailer to price match with Amazon.
- Best Buy price matches with: Abt, Apple, B&H Photo Video, BJ’s Wholesale Club, BrandsMart USA, Conn’s, Costco, Crutchfield, Dick’s Sporting Goods, Home Depot, Lowe’s, Menards, Microcenter, RC Willey, Sam’s Club, Nebraska Furniture Mart, P.C. Richard, Target, and Walmart.
- Price match period: Within 14 days
- Accepted proof: Hard copy of the advertisement or website displaying a lower price.
- Limitations: Products on Best Buy education, business, and marketplace stores on a third-party website are prohibited.
Excludes clearance, refurbished, and open-box items.
Only one price match is allowed per customer at the time of purchase.
- Highlight: If the retailer lowers their price during the return/ exchange period, they will match their lower price upon request.
Though the price matching rules vary slightly, all retailers aspire to achieve the same goal: retaining customers and winning over competitors.
Advantages of Price Matching
Boosts Sales
The price matching strategy ensures that low price is not a reason for losing a customer to a competitor.
Increases Consumer Loyalty
Finding a product in their wishlist at the best price delights the customers of retail chains offering price matching.
Improves Market Share
When the number of shoppers and the items they add to their carts increases, this promotional tactic’s intention to earn more revenue is met.
Enhances Brands’ Reputation
Retailers consistently having price matching schemes attract customers through the best deals and, over time, create a perception of trust.
Disadvantages of Price Matching
Price matching is a powerful strategy to attract customers if used with caution. Here are some reasons:
Reduces Profit Margin
A company willing to match a better price usually has a low-price model. When retailers price match with their competitors, they may lower the price further than intended, which can reduce profit margins.
Leads to Price Wars
When retailers lower and adjust their prices to attract customers, it prompts competition among retailers.
Risk of Losing Customers
When price is the only differentiating factor, competitors may undercut. Price matching interrupts customers’ buying process and stimulates them to look into competitors’ shops.
Incurs Additional Expenses
Most businesses that offer price matching have departments dedicated to price-matching contingency issues, which is an added expense for the retail company.
An Efficient Monitoring Service Inevitable For Price Matching
Amazon does not follow a price-matching strategy. It adjusts its prices in real-time using sophisticated dynamic pricing algorithms based on several factors.
To stay relevant in this competitive landscape, retailers must fine-tune the price of thousands of products daily. To keep up with competitor price fluctuations, retailers must adopt similar technologies to track pricing.
If you are a retailer contemplating implementing a price-matching strategy efficiently, book a demo with MetricsCart to experience our price-monitoring service.
