Showrooming Customers and the Future of Online Price Matching
On Jan. 8, Target announced it would extend its online price-match experiment to a year-round policy. This move has implications across the retail ecosystem, and retailers should be prepared for change.
Unless you've been hiding under a rock, you know that there's been a sea change in retail over the past several years, beginning with advent of e-commerce in the mid 90s, but accelerating rapidly since 2007 with consumer adoption of mobile — particularly smartphone and tablet — devices.
Mobile technology has empowered consumers to expect to have the information they need, and to consummate the transactions they want, whenever and wherever they are. This ability to have instantaneous access to product information and pricing can be of tremendous benefit to consumers and retailers alike, but in the form of "showrooming" it's become many retailers’ worst nightmare.
Target's expansion of its online price-matching policy is clearly a move to combat showrooming and, frankly, to survive. With the recent travails of retailers such as Circuit City, Best Buy and others, Target is doing what it can to attract, or at least retain, customers.
Although sales during Target's 2012 holiday test of the online price-match policy weren't stellar, the retailer's expanded and refined policy promises to be permanent. Although this is a move in the right direction, a look into the details of Target's policy shows that it's primarily a PR move to make its customers feel more comfortable buying from the retailer instead of shopping around. Here are some of the key factors that support that opinion:
- The list of online retailers that Target will match the prices of is relatively small: Amazon.com, Wal-Mart, Best Buy, Toys"R"Us and Babies"R"Us.
- Price matching doesn't include Amazon's third-party Marketplace items.
- Price matching is only within a seven-day window.
- Many of Target's products are private label and, as such, won't be affected by the policy.
- The policy requires in-store customers to request the refund through the guest services desk, which could cause many customers to not even bother.
Even with these factors, I believe Target won't be alone in this move and online price matching won't be a temporary trend among retailers. Price matching isn't the only answer to combat showrooming and meet or exceed customer expectations, however. As the retail world shifts from multichannel to omnichannel and the lines between physical and digital continue to blur, retailers will have to move to a more comprehensive model across all touchpoints to continue to service their customers and survive.