story by Kim Souza
Retail giant Wal-Mart might claim to be a constant low cost leader and match other retailers’ sale prices, but it does not match its online prices and makes no apologies for that policy.
The retailer outlines its policy on its website: “The merchandise and prices on our website do not reflect the merchandise and prices available in our stores. Our stores will not match prices with our online store (or other online prices) because we do not consider them to be in competition with our retail stores. Currently, we do not have access to store inventory lists or price lists at this website.”
Clark Howard, a nationally syndicated consumer advice writer, finds it hard to understand that a retailer claiming to “bridge the intersection of physical and digital” refused to give him the lower online price for a Lego set he recently tried to purchase for his son. The Atlanta Journal Constitution published his report about the experience.
Retail experts from across country have weighed in on this policy at RetailWire, most finding Wal-Mart ‘s actions toward Howard to be a step-back and a poor lesson in customer service.
“Retailers may have their reasons for not matching their own online prices, but to consumers those reasons don't make any sense. Whether it's Walmart, Gap, Target or other stores, all these policies serve to do is make consumers mad. Retailers should do a better job of explaining the practice or drop it,” according to Max Goldberg, president of Max Goldberg Associates.
Other experts like Frank Riso note that Wal-Mart will have to learn that it cannot manage its inventory with two different price models using their stores as pick-up and return centers.
“The consumer knows only Wal-Mart and not Wal-Mart Stores versus Walmart.com. It has taken at least 10 years for retailers to realize that the consumer only knows the brand and not the channel. Wal-Mart will learn, just give them time to reflect on it,” Riso added. He is the principal of Riso & Associates.
Jason Goldberg, vice president of at Razorfish, said the dual pricing policy is “horrible” because with a customer “it's all Wal-Mart.” The differences in overhead costs in the distinct channels are irrelevant to the consumer, Goldberg added. He said it’s out-of-character for the “Always Low Prices” retailer.
“In this world of perfect information and complete pricing transparency, consumers will know they aren't getting the best price from Wal-Mart and will always have to fear that they should be getting a better price — exactly what Walmart doesn't want,” Goldberg said.
Ironically, Wal-Mart has invested millions in advertising campaigns that promote its low in-store prices and recently vowed to roll out its “Savings Catcher” program and expand it to include general merchandise and produce. Wal-Mart has said its Savings Catcher program is about reassuring consumers that they are getting the lowest price when they shop at Wal-Mart’s physical stores. Goldberg notes that consumers may not buy the story given that store prices aren’t even Walmart’s best prices.
Other experts believe Wal-Mart has no choice but to try and match Amazon pricing online, which are apt to change throughout the day. The constant price changes in-store would be problematic. That said, when a consumer asks for the lower online price while in-store and that item will be filled from that supercenter, most believe the correct policy for Wal-Mart is to give that customer the lower price immediately.
“We're definitely seeing some growing pains as new models emerge for retailers to figure out how to do omnichannel. The problem here is that positioning the stores as being in competition with the website seems entirely bizarre, and that message will likely change,” said Matt Schmitt, president of Reflect.