Target matches Internet prices

Plan unveiled to meet online retailers’ charges year-round

Wednesday, January 9, 2013

— Target Corp. is now matching the prices year-round charged by the Internet sites of Amazon.com Inc., Wal-Mart Stores Inc., Best Buy Co. and Toys R Us Inc., the retailer said Tuesday.

Matching online prices is rare but expected to become more common as shoppers move increasingly online. Target, the nation’s secondlargest discounter behind Wal-Mart, said it will match prices that customers find on identical products at top online retailers, all the time.

Target’s move follows a similar holiday price match that began Nov. 1 and ended Dec. 16.

The move follows a disappointing Christmas-shopping season for the retailer, hurt by competition from online rivals and stores such as Wal-Mart that have hammered its low prices. It’s also the latest step from bricks-and-mortar stores to fight “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, said the discounter monitors the prices of 30,000 items, and thousands more online, to make sure it’s competitive.

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

Best Buy is matching prices with 20 online retailers on electronics and appliances at its physical stores through Jan. 31. Best Buy spokesman Amy von Walter would not say whether it would make that plan permanent.

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.

Wal-Mart has trumpeted its low price message but stopped short of matching prices with online rivals. The retailer said it can monitor prices across the Web every 20 minutes. That knowledge 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.

“Retailers have finally gotten the message,” he said. “You can’t put an impediment between consumers and consumption.” But he said that the policies can backfire. Stores have to make it easier for shoppers to get the price match. He noted the move also could turn out to be “profit draining” as more people are encouraged to shop the Web to get the lowest price.

Bines and other analysts said the online price match policies also are tough to implement given the constant fluctuation of online prices, even in the same day. That was 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.

Target’s shares dropped 1.1 percent to close Tuesday at $60.64. The Minneapolis-based company’s shares gained 16 percent last year.

Information for this article was contributed by Anne D’Innocenzio of The Associated Press and by Cotten Timberlake of Bloomberg News.

Business, Pages 25 on 01/09/2013