Wal-Mart executives are considering a new price-matching program for their online retail division starting this holiday season. They already give their managers in brick-and-mortar stores the ability to price match competitor sales if a customer brings in proof of a cheaper price, but Wal-Mart is considering taking this to a whole new level with their online program.
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Historically, Wal-Mart has always had low margins and high volume. They have built a reputation around their “Always Low Prices,” which drives more customers into their store. Wal-Mart is looking to do this online, too, with particular attention to competitor Amazon. Wal-Mart has had trouble with growth in the last few years and this is one possible move to turn things around.
Shelly Banjo of The Wall Street Journal reports that Wal-Mart’s profits might not benefit if the online price-matching program goes live. One reason for this is that it’s easy to switch from one website to another, so there is nothing really incentivizing customers to choose Wal-Mart over competitors.
The price-matching program works in brick and mortar stores because customers do not have to make an additional trip to another store just to get the best price. Plus, even if a customer compares prices on a mobile device while shopping in a brick and mortar store, they don’t have to go out of their way to make an online purchase, pay for shipping, and then wait for the item to arrive on their doorstep. Instead, they can ask the brick and mortar store to price match and get the item immediately.
Several online retailers, such as Target, are eliminating shipping charges for the holiday season. Wal-Mart is trying to decide the best marketing tactic to keep their sales above the competition while still making a profit. They’re still not sure what they’re going to do. [/show_to]