Target to match online prices with online rivals

30 Sep 2015 | Author: | No comments yet »

Target Expands Price-Matching Policy as Online Competition Grows.

The discounter said it will now match prices on goods sold by Amazon.com, Walmart.com and Costco and Sam’s Club — a move that could save shoppers plenty just as the holiday shopping season is about to begin in earnest. The retailer had excluded Target.com purchases from its policy that lets customers get a better deal if they show that someone else is selling the same item for less.Target Corp. is expanding its price-matching policy in stores and on its website, a sign of escalating competition with Amazon.com Inc. and other retailers. Starting Oct. 1, Target will match a longer list of competitors’ prices, going back as far as 14 days, the Minneapolis-based retailer said in a statement Wednesday.

The world’s largest retailer said that it would start offering curbside pickup for groceries ordered online in eight new markets this month – including Atlanta and Salt Lake City – with more to be added in the coming weeks. Wal-Mart has been testing online grocery delivery services in two markets and pickup in the five markets of Denver, Phoenix, San Jose, California, Bentonville, Arkansas, and Huntsville, Alabama. Wal-Mart, the brick-and-mortar retail giant with an increasing online presence, has long had Target.com on its price-match list, but Target has not offered to match Walmart previously. The announcement solidifies a strategy of playing to its bricks-and-mortar footprint, with an estimated 70% of the US population living within five miles of one of its 4,600 stores. “We are not walking away from delivery,” said Michael Bender, chief operating officer of global e-commerce at Wal-Mart. “But right now the focus for us is pickup, driven largely by what our customers are telling us.” Target Corp this month partnered with Instacart Inc to deliver groceries for US$3.99 (RM17.75) per order in a pilot offering in Minneapolis.

It is also aiming to steal business — and market share — from rivals, according to CEO Brian Cornell, who was named to the top spot 15 months ago. Wal-Mart Stores Inc., Target’s biggest competitor, also has renewed its focus on price in the past year, putting pressure on suppliers to lower their costs.

Bender said Wal-Mart is targeting pickup in part because it allows customers to pinpoint a pickup time, rather than having to be at home at a set delivery time of fresh items. Target Chief Executive Officer Brian Cornell has been working to reduce expenses and refine the chain’s product assortment, a turnaround effort that followed a sales slump and massive data breach in the holiday season of 2013. Under the new price-matching policy, consumers looking for such an item could save more than $80 by telling Target that the same bike is sold on Amazon for $319. AAA Energizer batteries were 50 cents cheaper on Amazon than on Target’s website and a pair of men’s Georgia Boot work boots, priced at $99.99 at Target — pre-price match — could cost you 25 percent less once you told Target that Amazon was selling them for $74.21. “These are simple changes, but they mean a lot for our guests,” Jason Goldberger, president of Target.com, told a packed room of 13,000 store managers at a recent meeting held in Minneapolis, according to the AP. Target’s latest change in policy follows the lead of Walmart, Best Buy and Staples, all of which match their online prices with online rivals, the AP reported.

Even with recent successes and adoption of online-friendly policies, the question remains over whether Target can compete with large rivals Amazon and Wal-Mart. Fayetteville and Charlotte, North Carolina; Ogden, Utah; Nashville, Tennessee; Tucson, Arizona; and Colorado Springs, Colorado are the other new markets for the service.

Sucharita Mulpuru-Koadali, an analyst at Forrester Group, told the AP that fewer people take advantage of price matching when they buy a product online versus buying it in a store because the process is more tedious. In some cases, that will entail promoting workers within a store, but overall it expected to add some headcount related to the service, Bender said. “The economics of pick-up are much better for a retailer. Neither brick-and-mortar retailer, however, has offered a competitive equivalent to Amazon’s “Amazon Prime” membership, which offers free 2-day shipping nationwide, along with other perks. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN.

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