by Lance Turner
Posted 10/18/2012 12:57 pm
Updated 1 year ago
The Wall Street Journal notes today that retailers Best Buy and Target Corp. are ready to go all out battling "showrooming" this holiday season, pledging to price-match rivals including Amazon.
The move comes as more people view items in brick-and-mortar stores but ultimately buy them online, often at better prices. It's a trend Arkansas Business examined Oct. 8:
"It happens quite a bit," said Robert Coon, who represents the Alliance for Main Street Fairness in Arkansas. "Retailers see it happen whether a person is asking questions or whether they pull out their iPhone app and scan the barcode. It's tough for retailers to deal with. They're entrepreneurs, taking risks, investing capital into their business. For people to come in and use them, then move onto something else, that's a hard thing to embrace."
Best Buy will match prices on electronics and appliances—but not other products—from 20 different online rivals. It excluded third-party sellers like those on Amazon Marketplace, where prices are the most volatile.
Best Buy said its staff must verify on a store computer that the rival's price is actually lower at that moment and that the product is readily available.
And a salesperson or manager can refuse to match a price if they deem it too low, a Best Buy spokeswoman said.
Target said shoppers have to bring in proof that a lower price is available through a small number of competitors' websites. It hasn't yet detailed many of the exceptions to its program, which will start Nov. 4 and run through Dec. 16.
So what about Wal-Mart? Its online retail operation, WalMart.com, is designed to take on Amazon. But its thousands of retail locations feel the pinch of showrooming just like Target and Best Buy. Wal-Mart is no stranger to price-matching.
So far, Wal-Mart hasn't jumped on the online-price-matching bandwagon. Mike Duke, chief executive of Wal-Mart, said last week that the chain had not yet figured out a way to implement it.
Retail experts agree it will be tough because prices fluctuate frequently on the Internet.
It's also tough because you're competing against the vastness and razor-thin margins of the wider web. As the Journal notes, Best Buy prices can be 16 percent higher than Amazon's. For brick-and-mortar stores to get into a grudge match with born-on-the-web retailers -- well, that could be a race to the bottom. And for retailers, a race to an unsustainable business. But what choice do they have?