Saturday, February 24, 2018
Business

Target unveils year-round price matching

NEW YORK — Target Corp. is pledging to match prices of select online rivals year-round, a move that underscores how physical and online retailing are being meshed together.

Matching online prices is rare but expected to become more common as shoppers move increasingly online. Target, the nation's second largest discounter behind Wal-Mart Stores Inc., said it will match prices that customers find on identical products at top online retailers, all the time. The online list includes Amazon.com as well as the websites of Walmart, Best Buy, Toys R Us and Babies R Us.

Target's move follows a similar holiday price match that began Nov. 1 and ended Dec. 16. Target is also making permanent its holiday offer of matching prices of items found at its stores with those on its website. For the first time it will include products that are out of stock on Target.com.

The moves follow a disappointing holiday shopping season for the Minneapolis-based retailer, hurt by stiffer competition from online rivals and stores like Walmart that have hammered its low prices. It's also the latest step from brick-and-mortar stores to combat "showrooming" — a growing trend for customers to browse stores to check out products, and then go online to buy the same products for less.

Mark Schindele, Target senior vice president of merchandising operations, noted the discounter monitors prices of 30,000 items, and thousands more online, to make sure it's competitive. But Target says it had to do more to give shoppers more confidence.

"We believe that our prices are competitive year-round," Schindele said in an interview. "We also know that our guests shop in many ways."

Many major stores have offered price matching guarantees for local competitors' brick-and-mortar stores, but it wasn't until this past holiday season that the focus was on matching online prices. Analysts believe that the trend will increase as stores are realizing they need to wake up to the increasing shift among consumers to online, which accounted for about 10 percent of holiday sales this past season. Still, such policies can be difficult in practice, because online prices tend to be lower and fluctuate often.

Since last summer, Toys R Us has been matching online prices for all identical items or models of baby gear from selected national competitors. Like Target's policy, it excludes Amazon's third-party Marketplace items.

Walmart has trumpeted its low price message but stopped short of matching prices with online rivals. The Bentonville, Ark., retailer said it can monitor prices across the Web every 20 minutes. That has helped the discounter better react to the competition's price changes.

Joel Bines, managing director and co-head of the retail practice at AlixPartners, praised recent moves by retailers to have an online policy.

Bines and other analysts say the online price match policies are also tough to implement given the constant fluctuation of online prices, even in the same day. That was particularly evident around Thanksgiving week. From Nov. 19 to Nov. 30, Amazon.com doubled the average number of promoted products it changed prices on each day compared with the same period a year ago, according to Dynamite Data, which tracks online prices.

Still, having a price match policy in place is essential for cheap chic Target, analysts say. The discounter, known for selling trendy merchandise and staples under the same roof, has seen uneven sales growth since the economic downturn as it tries to convince frugal shoppers it has good prices. This past holiday season, Target chose to limit promotions to preserve profits. That resulted in muted sales in November and December. "

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