Target's Price Match Elimination: Strategy or Mistake? | Fast Five Shorts
Target price matching policy, retail pricing strategy, target vs walmart, competitive pricing retail, target brand perception, retail customer loyalty, pricing policy changes, target strategic decisions, retail price wars, customer value proposition.
This week on the Omni Talk Retail Fast Five podcast, sponsored by the A&M Consumer and Retail Group, Simbe, Mirakl, Ocampo Capital, Infios, and Clear Demand, Chris and Anne debate Target's controversial decision to eliminate price matching.
Analyze whether this move strengthens Target's position or drives customers to competitors like Walmart and Costco. Get expert insights on the real reasons behind this policy change and its impact on Target's already challenged brand perception.
🔔 Subscribe for weekly retail insights!
For the full episode head here: https://youtu.be/A11X6MXWL9U
#target #pricematching #retailstrategy #competitivepricing #retailbrand #customerloyalty
This podcast uses the following third-party services for analysis:
Podcorn - https://podcorn.com/privacy
Transcript
Target will no longer match pricing for identical items at places such as Walmart and Amazon, according to Retail Dive.
Speaker A:Target will no longer price match products starting on July 28.
Speaker A:The company said that it's found that shoppers quote overwhelmingly price match Target and not other retailers, end quote.
Speaker A:According to a statement from a spokesperson that was shared with Retail Dive.
Speaker A:Under the previous policy, Target would match prices for identical qualifying items at Amazon and Walmart.
Speaker A:Shoppers could request pressed such price matching at the time of purchase or within 14 days afterward.
Speaker A:Chris, do you think Target will regret the day that it made the decision to stop price matching or do you think stopping price matching is a good move for them?
Speaker B:Man, I have not talked to you about this one at all.
Speaker B:So I have no idea which way you're going to go with.
Speaker B:Go, go with it, go with it, on it.
Speaker B:So I'm a little worried that I might be dangling on a limb here, but we'll see.
Speaker B:But you know, for the whole.
Speaker B:And I can't get behind this.
Speaker B:I just can't.
Speaker B:I've tried really hard for a lot of reasons.
Speaker B:First, the number of people that actually price match is pretty damn negligible.
Speaker B:So it's not going to move the needle financially.
Speaker B:Like, it's just not so.
Speaker B:And then my second point that I'm kind of annoyed about in terms of how this was conveyed in the media is if the customers are overwhelmingly price matching Target, you have to ask yourself why is that Target?
Speaker B:Your prices should.
Speaker B:Prices should never be lower than Walmart and Amazon.
Speaker B:So, so I'm not buying that that's the real rationale either.
Speaker B:Something else has to be going on.
Speaker B:And the only thing I can think of is that they're scared going into the holidays because of the impact of what they're seeing in the macroeconomic climate.
Speaker B:And, and they're scared of it in a way that they've never had to be before because as the mentor said to me, they try to do a good job of comp shopping Walmart and Amazon wherever possible.
Speaker B:And so but you, Target can't win a price war, but they can lose one.
Speaker B:And so I think they're saying we want the flexibility to not have to match Walmart and Amazon in the upcoming season.
Speaker B:And is that threat real?
Speaker B:Yeah, possibly.
Speaker B:But on the flip side of it, you already have people shifting to Walmart and Costco and now you're giving them another reason to shift allegiances when price perception has always been a problem for you.
Speaker B:Target, that's why you came out in the spring and the Summer and talked about your price decreases that you're planning to take.
Speaker B:So net net.
Speaker B:Even if that's the rationale, which I could understand potentially strategically, one, Target's not saying that, so they're kind of being obfuscating in the media.
Speaker B:And two, I don't like that rationale either.
Speaker B:So you know, I had place to run data for me and too, so I'm going to add some data in this conversation.
Speaker B:Did you know that the percent of shoppers that are also shopping Costco Target shoppers that are also shopping Costco regularly has gone from 28% to 30% in just the last two years.
Speaker B:You know, that's almost a 10% change.
Speaker B:So that's pretty significant.
Speaker B:And so you're just giving people more reason to question, am I getting a good price at Target?
Speaker B:When you're taking the price match out and that's why the price match exists.
Speaker B:So overall I think it's a short term reactionary move.
Speaker B:It's like honestly the best thing I can equate it to is it's like getting rid of Reddit, Red and khaki versus making a long term decision that is the best decision for the brand.
Speaker B:The brand at Target is the weakest it's ever been.
Speaker B:It is the weakest it's ever been the brand of Target itself.
Speaker B:So get it.
Speaker B:Reading price, getting rid of price matching sure as heck doesn't help that brand perception in my mind.
Speaker A:So Chris, I mean I'll start off by saying that I agree with you.
Speaker A:I don't, I don't understand here and I cannot make heads of tails of how this was messaged.
Speaker A:Like was this leaked to the media so they had to put something out because if I were Target I would be, I would be more strategic about this message.
Speaker A:Like as a member of Target Circle perks you get.
Speaker A:You know, we're going to make sure that you're part of the, the like best price that we can give you or that we're researching these top items for the season to make sure that you're getting the lowest price possible and you're earning rewards or something like that.
Speaker A:Like this, the way that this was pushed out just we're ending price matching feels like another reason to further prevent somebody from shopping at Target.
Speaker A:And I think while that while the timing might be necessary due to, you know, the cost of goods changing this time of year, it just, it feels like the timing is just absolutely poor in terms of a guest perspective and whether or not I'm going to choose Target or if I'm going to go to Costco, like you just said.
Speaker A:The last thing that I wonder about, Chris, is I again, I think if I were Target I would be investigating where I could make this up in terms of technology.
Speaker A:Like are you investing in digital pricing or different pricing software to make sure that you don't have to manually do this like that your guests aren't the one bringing these price differences to your attention.
Speaker A:Or if fraud is the issue where like you feel like people are overwhelmingly taking advantage of Target, like what are you investing in there to make sure that you're, you're set up for success?
Speaker A:The technology is out there, Target.
Speaker A:And that's what I really baffles me because it feels like there should be more to this instead of just we're just going to stop doing price matching because the optics of that are terrible.
Speaker B:That's, that's where I'm reading between the lines here.
Speaker B:And I think, I think that's, it's, it's, there's one point that you made in there that's that it's especially salient to me which is the fact that Walmart's going to have electronic price levels on every shelf.
Speaker B:So Target, you're already going to be behind them anyway.
Speaker B:Right.
Speaker B:And so now you're taking Price Match out and that's going to make the perception of your prices relative to Walmart because Walmart can be more flexible even worse in the minds here from where it is now versus where it's going to be a year or two, two from now.
Speaker B:So the only rationale I can think of is that Target wants to be able to control its prices and doesn't want to have to comp shop Walmart and Amazon anymore.
Speaker B:It's the only conceivable way.
Speaker B:And, and I think the other point I make too is you're kind of giving them credit for the fact that this got leaked.
Speaker B:I'm actually curious if it didn't leak because this is such a significant change that they have to get in front of this, they have to communicate this to people very clearly that you can no longer do this in our stores.
Speaker A:True.
Speaker B:You know, you don't want to just, you don't, you don't want to just throw that onto people like willy nilly and they came up with this bogus excuse of like people price match Target more than they price match the other retailers, which you should have also.
Speaker A:How do they know that saying that you should have.
Speaker B:Well, because they know who they're price matching.
Speaker B:They know who they're giving the data for, like, they know who's coming in and what ad they're they're referencing or what price they're referencing.
Speaker B:But why should that be happening?
Speaker B:Why should your own customers be caught price copying you?
Speaker B:That's insane when you think about it.
Speaker B:So, like, the rationale is insane.
Speaker B:The, the reading the headline too.
Speaker B:I'm like, I have the.
Speaker B:I have a feeling the reporter doesn't even know what the hell they're saying.
Speaker B:And because, like, that's essentially, I think, what they're saying.
Speaker B:So, like, you know, the reporters have been like, why is that happening?
Speaker B:So I don't.
Speaker B:This is so that now we both hate this.
Speaker B:We hate this move.
Speaker A:I just don't get it.
Speaker A:Somebody's going to take me to coffee and explain it to me.
Speaker A:I will listen.
Speaker A:I just don't get it.
Speaker A:Okay, Chris, I've tried and I'm not.
Speaker B:And I do not want to continue to critique Target, but they just keep giving us so much fodder of things that just aren't making sense.
