While we’re on the topic online price matching at big box retailers (both Best Buy and Target have come out with new policies on this front), I thought it might be worth looking at how this might affect their bottom lines.
While the primary goal of these programs — to turn casual shoppers using the store as a showroom before purchasing online into buyers — is an admirable one, retail experts think there are a number of risks involved.
First and foremost, as I pointed in my post about the Best Buy policy, there’s a lot of wiggle room and there’s thus a risk that it might not be applied consistently or evenly across locations (or even employees within a location). This could lead to a healthy dose of confusion and anger amongst shoppers.
On top of that, there’s a risk that customers will jam the checkout lines while trying to save a nickel here and a dime there on a cartful of products. The end result here could be more anger and a tendency to drive customers online to avoid the hassle.
Also: Do Best Buy, Target, and others really want to encourage customers to start checking prices online? According to a survey by William Blair & Co., Target’s prices average 14% higher than Amazon’s whereas Best Buy’s prices were 16% higher. Encouraging customers to discover these differences might hurt in the long run, particularly if the price matching programs are short-lived or seasonal.
And finally… If the programs are too successful, profit margins could suffer.
It’s a fine line, but it seems like brick & mortar retailers have to do something to combat the loss of customers.
What do you think? Will these sorts of policy changes have a net positive effect on big box retailers? Or will the negatives outweigh the positives?