Walmart Might Begin Price-Matching Amazon, Other Online Retailers
By October 30, 2014
It’s not uncommon for consumers view items at a store and then purchase them for a lower price online. One of the nation’s largest retailers is apparently tired of losing those customers and may begin price-matching its online competition this holiday season; a trend retail analysts predicted less than a month ago.
The Wall Street Journal reports that executives at Walmart are discussing whether or not now is a good time to expand its current price-matching program to include online retailers like Amazon.
The decision reportedly balances on determining how much the company stands to lose if the program were to go nationwide.
A spokesperson for Walmart tells the WSJ that the company has previously given store managers the discretion of whether or not to match certain online prices on a case-by-case basis.
The expanded program would be in addition to Walmart’s “Savings Catcher” program – which has produced mixed results – that allows shoppers to scan in their receipts and have Walmart determine if the customer could have paid less elsewhere – with the exception of online retailers.
If the program comes to fruition, Walmart would be joining the likes of Best Buy and Target, which previously implemented online price-matching programs to keep customers from browsing items in their stores, only to make purchases online from competitors like Amazon.
Industry officials say that by expanding to an online price-matching program, Walmart could regain its reputation as a low-price leader at physical stores.
According to the WSJ, Walmart’s online store has already begun closing the gap with competitors such as Amazon. A Wells Fargo report found that in August, the company’s prices were nearly 10% lower than those of Amazon.
While offering price-matching might bring more customers into Walmart stores, it could prove costly to the company’s bottom-line.
Shortly after Best Buy began its online price-matching program, the company reported a hit to its margins. However, officials with the company say the cost of price-matching will eventually come down as prices between stores and online merchants become more even.
Additionally, an industry analyst says companies that allow online price-matching often reap the benefits when it comes to their reputation, as consumers begin to see them as a serious competitor with online retailers.
If Walmart decides to go ahead with the program, it might need to do so quickly, as the holiday shopping season is apparently already underway.
Online shopping is expected to take an even bigger piece of the holiday pie this year, with 44% of consumers planning to do their shopping on the web, an increase from 31% five years ago, the WSJ reports.
Last holiday season, Walmart announced a program in which they would match any competitor’s holiday sale price, including those on Black Friday. However, the promotion still did not include online retailers.
No comments:
Post a Comment