Pricematching: genuine or there to imply you're the cheapest
londoncommuter
Posts: 1,550
I've been pondering price matching of late (very sad). What do you reckon as to why they're offered:
1) Retailers want all business even if the margins will be low on the pricematched transactions as they would normally expect to make some profit as their cost is a lot less than RRP; or
2) They want to build loyalty with customers by genuinely always offering the lowest price so customers do all their shopping with them, maximising profits over the long run. They take a hit on the pricematched stuff but don't mind; or
3) It's a cynical ploy to imply you're the cheapest and there's no need for the customer to look round.
I guess it must vary by shop but with some it really must be (3) as their pricematch policies are so restrictive that it feels like they don't want to match really and are quite happy not to have your business. Having a tiny number of retailers they'll match to or not allowing for discount codes flashing across the competitors website, that sort of thing.
What are your thoughts? Anyone in the know with any particular shop?
1) Retailers want all business even if the margins will be low on the pricematched transactions as they would normally expect to make some profit as their cost is a lot less than RRP; or
2) They want to build loyalty with customers by genuinely always offering the lowest price so customers do all their shopping with them, maximising profits over the long run. They take a hit on the pricematched stuff but don't mind; or
3) It's a cynical ploy to imply you're the cheapest and there's no need for the customer to look round.
I guess it must vary by shop but with some it really must be (3) as their pricematch policies are so restrictive that it feels like they don't want to match really and are quite happy not to have your business. Having a tiny number of retailers they'll match to or not allowing for discount codes flashing across the competitors website, that sort of thing.
What are your thoughts? Anyone in the know with any particular shop?
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Comments
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Why don't you just buy it from the cheapest place if you're that bothered?0
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Why don't you just buy it from the cheapest place if you're that bothered?
Lots of reasons. You might prefer the return policy, have vouchers to spend or just want to support your local retailer. As you say though, at the end of the day you're probably going to go with the cheapest place which was why I was wondering why they're happy to turn business away. Did they never want to price match in the first place?0 -
It's a part of a bigger picture. I work for an online retailer (not bike related) and a lot of it comes down to instilling trust in the potential customer so they come to you, not a competitor. There are still a lot of people out there who are distrustful of shopping online or who simply don't know how to get the best out of it.
These people like to be reassured with a good website, guarantees, price promises, links to review sites like Feefo and links to Twitter, Facebook, etc. They won't shop around if they're confident they're not going to get ripped off. It takes a surprising amount of effort to get a website to appear friendly and customer focussed. Price matching helps convince people the customer is more important than the business.
It costs nothing to offer price matching and it's surprising how seldom people take up the opportunity but it is something people like to see on a website.
The retailer may miss some customers who simply buy at the lowest price they see on the web, but it's a chance to win the more savvy customer that realises that many retailers will not just price match but offer to beat a competitor, especially on big ticket or loss leader items.
It's like quoting RRPs or "Special discount" on items. You can be cynical and call it bull sh!t, or you can look past that and use it to your advantage as a paying customer.0 -
I think you miss the point a little that price match schemes are generally defensive moves that can protect both market share AND margin:
- If you know your retailer of choice will match lower prices, then you have no reason to buy from someone else... so they are protecting their market share
- Price matching actually can result in tacit collusion whereby there is less motivation to lower prices in an attempt to gain market share (because the prices will be automatically matched), and everyone keeps their prices higher... so margins are protected
Also on point 3), admitting that you need to be able to match retailers with lower prices doesn't imply that you're the cheapest... if anything it would suggest the opposite.0 -
For any online retailer, if customers can actually be bothered to go complete the necessary forms and go through price matching rather than just buy from the cheapest place then they must be doing something very right.
There are only two places I ever bother to do that on. Wiggle - because you get Gold/Platinum discount when you spend above a certain level, plus their returns are excellent; and Evans - because you can click and collect to your local branch, and try stuff on and talk to the store staff when picking up.
You can see the effort those two go to in order to elevate themselves over the race to the bottom price scrum internet shopping was always feared to become, using whatever advantages they have. I can't see a compelling reason to do it for any other supplier.
In Wiggles case I have no doubt they can source products as cheap as anyone and so if someone else can make money on a product, they probably can too. In Evans case their overheads must be much higher, though it always seems 90% of the stuff that I want isn't in store stock, only at the Gatwick Warehouse. They are probably just using it as a defensive tactic to stop customers abandoning their brick stores.0 -
For any online retailer, if customers can actually be bothered to go complete the necessary forms and go through price matching rather than just buy from the cheapest place then they must be doing something very right.
There are only two places I ever bother to do that on. Wiggle - because you get Gold/Platinum discount when you spend above a certain level, plus their returns are excellent; and Evans - because you can click and collect to your local branch, and try stuff on and talk to the store staff when picking up.
You can see the effort those two go to in order to elevate themselves over the race to the bottom price scrum internet shopping was always feared to become, using whatever advantages they have. I can't see a compelling reason to do it for any other supplier.
In Wiggles case I have no doubt they can source products as cheap as anyone and so if someone else can make money on a product, they probably can too. In Evans case their overheads must be much higher, though it always seems 90% of the stuff that I want isn't in store stock, only at the Gatwick Warehouse. They are probably just using it as a defensive tactic to stop customers abandoning their brick stores.
Completely agree with this. Evans recently had a spend £100 and get a £20 voucher, so I combined this with price match, Quidco & click and collect and it was a winner.
Wiggle appear to be matching competitors & German retailers already on some key lines (DI2 components for one), so they know that people are shopping around...on my latest build, I used 5 different retailers including the actual shop to purchase the components. I've been ripped off by my LBS before, It won't happen again.
The return process is key nowadays, Wiggle have it nailed on. Returns label enclosed, click on a few things online and take to my local Londis to send away for free. Email from Wiggle when all sorted too.
No wonder that LBS' are struggling in some respects, price, availability and speed are key nowadays.Orbea Orca OMX DI2 MyO
Kinesis 4s Di20 -
I'm exactly the same, Wiggle for easy returns and Evans for the recent £20 vouchers. I agree you might as well just buy from the cheaper place if you're positive about sizing and don't need to pick it up immediately.
I'm just a little surprised at some of the retailers Evans won't match against and the staff seem very keen not to show any flexibility. It's as though they don't want to pricematch but like to brag they do to somehow imply they're cheapest.
I know ALIHISGREAT disagrees but I think this is powerful in marketing. My in-laws happily believe (or willingly let themselves be fooled) into just shopping at John Lewis without ever looking around as they're bound to be the cheapest as they say they are.
Chain Reactions are another great candidate. They never used to offer matching but do now (to a grand total of five other shops) and then only give you vouchers back. They clearly don't want to pricematch but feel they have to advertise it.
On another angle, I've had a couple of smaller places who boast about matching refuse purely on the grounds that the other price is too low!0 -
I'm exactly the same, Wiggle for easy returns and Evans for the recent £20 vouchers. I agree you might as well just buy from the cheaper place if you're positive about sizing and don't need to pick it up immediately.
I'm just a little surprised at some of the retailers Evans won't match against and the staff seem very keen not to show any flexibility. It's as though they don't want to pricematch but like to brag they do to somehow imply they're cheapest.
I know ALIHISGREAT disagrees but I think this is powerful in marketing. My in-laws happily believe (or willingly let themselves be fooled) into just shopping at John Lewis without ever looking around as they're bound to be the cheapest as they say they are.
Chain Reactions are another great candidate. They never used to offer matching but do now (to a grand total of five other shops) and then only give you vouchers back. They clearly don't want to pricematch but feel they have to advertise it.
On another angle, I've had a couple of smaller places who boast about matching refuse purely on the grounds that the other price is too low!
Interesting! I've never had Wiggle refuse me, and I've spent £3k in 12 months or so with them. They possibly operate on a "whole basket" system, much like major supermarkets. They know there will be a chance of losing margin on certain branded items, but this will be made up by their own label "add ons".
For all the customers price matching and squeezing every penny from them, there will be 10 x as many customers paying the advertised price + inner tubes etc that improves their overall margin mix.
Wholesalers in the food industry might only make 2% margin on branded items, but over 30-50% on own label. Same should apply for cycle shops.Orbea Orca OMX DI2 MyO
Kinesis 4s Di20 -
I remember The Economist did a piece on price matching a while ago… here it is:
http://www.economist.com/news/finance-and-economics/21643239-price-match-guarantees-prevent-rather-provoke-price-wars-guaranteed-profits0 -
I bought cycling kit from Go Outdoors of all places recently. They have a good matching where they will give you an extra 10% off the matched price. Their only criteria is they can check it online or by calling the shop. Also b the item is in stock and exactly the same size/colour/ specification. I got a 40% reduction off their price in store which was actually less than rrp.
Evan's cycles allow matching in online purchases. You fill in a form online with a link to the page with the cheaper price. They only match.certain sites but they include a lot of the main players including cheap paces. Once you've sent the form off through the online system you get an acknowledgement then about 15 minutes later a decision. Either they'll accept the price match and give you a voucher code or decline it with their reasons. If it's declined just.find the next best price and in the only time I did it I ended up sending 3 price match requests after getting a failure all three were accepted. I'd have sent more as it annoyed me when I was declined because it was a genuine bike shop website that was cheaper than
than IMHO price match schemes work if the matching company is fair and open in the details of the scheme and you prefer dealing with them anyway. I doubt I'll use a price matcher just because they do it but for other reasons. I'm sure they're only really good to keep customers not win new ones.0 -
Its all about hitting price points for various types of consumers. Some just pay full price, some only once reduced and some like myself only buy real bargains. Price manipulation is very common with very high RRP used to create fake sales etc. Plenty of real bargains if you hunt around and are patient.0
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I'll use Wiggle as the example. They're probably the largest cycling retailer in the UK, therefore most people just go on Wiggle to get what they need without bothering to check if it's cheaper at CRC, Evans etc. and therefore they'll be paying more than they need to. For those who bother to do the price match, Wiggles profit on that product are smaller (I'd 99% guarantee they're still making a profit though). Customer then thinks Wiggle are great because it's just as cheap as anywhere else but also has free returns and a bag of Haribo, recommends to friends and continues to use Wiggle for most purchases in the hope they'll get the platinum discount if they continue to spend at Wiggle.
So really, it's all 3 of your points; every little helps, brand loyalty and you won't find cheaper than us.
Whilst we are on the subject, a small tip: Halfords price match most products on their website (although not in store), click and collect to get the online price in store and then flash your BC membership card for another 10% off. It's great as long as they don't screw up your reservation (luckily hasn't happened to me, but I've heard a fair few stories about it).0 -
I'm exactly the same, Wiggle for easy returns and Evans for the recent £20 vouchers. I agree you might as well just buy from the cheaper place if you're positive about sizing and don't need to pick it up immediately.
I'm just a little surprised at some of the retailers Evans won't match against and the staff seem very keen not to show any flexibility. It's as though they don't want to pricematch but like to brag they do to somehow imply they're cheapest.
I know ALIHISGREAT disagrees but I think this is powerful in marketing. My in-laws happily believe (or willingly let themselves be fooled) into just shopping at John Lewis without ever looking around as they're bound to be the cheapest as they say they are.
Chain Reactions are another great candidate. They never used to offer matching but do now (to a grand total of five other shops) and then only give you vouchers back. They clearly don't want to pricematch but feel they have to advertise it.
On another angle, I've had a couple of smaller places who boast about matching refuse purely on the grounds that the other price is too low!
I think John Lewis' price match scheme looks like powerful marketing because of.. err... the powerful marketing behind it
John Lewis have been "Never knowingly undersold" since 1925 (that's a lot of years of marketing), and its not really a distinct price matching scheme kind of marketing as over that amount of time, the slogan becomes associated with everything that's good about John Lewis - price, quality, customer service, after sales, etc.
And on the ChainReaction point, I think what they're doing actually reinforces what I was saying - its a defensive move.. the point is that its there for the people who would go and buy elsewhere, but its not advertised on their main-page (apart from the navigation links at the bottom of the page). Evans seem to be the same, but Wiggle do have a link near the top of their page.0 -
Whilst we are on the subject, a small tip: Halfords price match most products on their website (although not in store), click and collect to get the online price in store and then flash your BC membership card for another 10% off. It's great as long as they don't screw up your reservation (luckily hasn't happened to me, but I've heard a fair few stories about it).
Technically other way round - Halfords will pricematch in store, but you need to have proof of the other retailers price.
BC Membership 10% off is only for instore items not online ones - but is usually accepted anyway0 -
[url=http://www.bikeradar.com/forums/viewtopic.php?p=19771700#p19771700]Penguin of Death[/url] wrote:
Whilst we are on the subject, a small tip: Halfords price match most products on their website (although not in store), click and collect to get the online price in store and then flash your BC membership card for another 10% off. It's great as long as they don't screw up your reservation (luckily hasn't happened to me, but I've heard a fair few stories about it).
Technically other way round - Halfords will pricematch in store, but you need to have proof of the other retailers price.
BC Membership 10% off is only for instore items not online ones - but is usually accepted anyway
Didn't know they price matched in store, I've even shown them on my phone that a product was cheaper on their website than in store and was told there was nothing they could do. I found it funny that I could have done a click and collect on my phone and then bought it at the cheaper price once I had the reservation number!
Didn't know that about the BC discount either, never had it refused though.0
