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March 31, 2013

To Match or Not to Match?

by uvapreston

In class and our whitepapers, we have extensively discussed the attempts of brick and mortar retailers to remain relevant in the modern marketplace.  Consumers can shop from the convenience of their couch and easily locate the lowest prices available which are often significantly below those at in store counterparts.  Nevertheless, when carried out properly, the experience of locating and purchasing a desired item in store can add customer value in a uniquely tangible way.  For all the convenience online shopping affords, it can be more enjoyable, and, in some cases, more efficient, to experience an item firsthand and make the right choice the first time to avoid expensive and time consuming shipping hassles.

To this end, recent experience while searching for a camera and software in a big box electronics retailer left me pleasantly surprised.  A friend had told me that the same chain had been willing to price match both electronics hardware and software in the past.  In my case, staff did not question my request to price match an item almost 25% below the shelf price and the transaction was quickly completed.

This visit left me pleased since it did not necessitate traveling out of the way and netted a low, online price without the extra costs, delays, and uncertainties of shipping.  Nevertheless, while easy price matching enhances customer value, it remains to be seen if physical stores can sustain their infrastructure when selling at online prices even if they are able to attract more traffic through such policies.  It would be interesting to investigate the proportions of retail buyers who accept the shelf price, request a match, or simply “showroom” with their smartphones and then purchase online.  If the margins on items sold at shelf price markup are crucial to sustaining brick and mortar operations, the long term utility of price matching and potential innovations such as real-time market price parity labeling appear questionable from a retail standpoint.

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