Target today made a huge move to counteract the practice of “showrooming,” the term that refers to how consumers are using retail brick-and-mortar stores to go hands-on with items, which they then order online for less – often from competitors like Walmart and Amazon. The company announced that it is now extending its holiday price matching policy year-round, in order to match those prices offered by online retailers like Amazon and Walmart.com, as well as BestBuy.com and Toysrus.com (including Babiesrus.com).
The deal also includes Target.com, just in case Target’s own online property ends up competing with its retail stores on price. The price match is only being offered for up to seven days following the purchase, and as before, the policy includes print ads from other local retailers, too.
It’s hard to say whether or not the move will have the desired impact. Target was price-matching online retailers over the holidays (Nov. 1 – Dec. 16), but December sales were still flat, year-over-year. In Target’s last earnings call, CEO Gregg Steinhafel told analysts that Target stores didn’t see a lot of price match activity. Still, given this new policy, the company is essentially acknowledging that competition from e-commerce sites is affecting its bottom line. Otherwise, why bother?
Price-matching can be a dangerous game, too, as Toys”R”Us and Best Buy found out, recently issuing complaints to the attorneys general in over half a dozen states, saying that Walmart’s ads were misleading. Best Buy specifically cited an iPhone 5 price match, saying it lost $65,000 on the day of a Walmart Facebook promotion, because it had to match the chain’s $150 price, despite the fact that iPhones were out of stock in many places.
Showrooming remains a concerning trend for the retail industry, as more users than ever shop on web and mobile. In mid-2012, comScore released a U.S. “state of the internet” report, which found that 35 percent of users were engaging in showrooming, leading them to buy online for a discount. The most popular categories included the obvious bigger ticket items, like electronics, but more concerning for brick-and-mortars, customers were also showrooming apparel and accessories. That latter category was traditionally safe from the practice, as consumers bought offline due to the need to try things on for fit. No-hassle returns from online competitors have clearly had an impact in terms of turning consumers’ homes into dressing rooms.
72 percent said their number one reason for showrooming was looking for a better deal. Forty-five percent said they were also interested in seeing the item in person. Twenty-four percent bought online because offline inventory was out of stock, comScore had reported. A separate report from IDC found that showrooming was most popular on weekends, with the actual showrooming taking place on Saturdays, while retail app use surged on Sundays, as the results of those price matching efforts paid off.
According to Target’s website, the price match may be requested at Guest Services prior to a purchase with proof of current lower price, or by bringing in your original Target store receipt and proof of the current lower price. The policy is effective as of now.
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