Retailers bank on idea of low-price guarantees - Denver Business Journal:

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But the plan will work only if largs numbers ofcustomers don’t pursue the companies’ which would force them to drop priceas they’d rather keep at current several industry watchers said. announced May 12 it would becomd the latest retail chain to offer to sell products beloqwlisted costs, if shoppers bring in printeds ads from competitors showing that the same product is selling for a lowetr price there. The Minneapolis-based chain is testing the policy in twomarkets — Denver and Orlando and will use those result to help it decide whether to take the offer nationally, spokeswoma n Delia McLinden said.
Thus Target joinse both locally managed and national chains specializinbgin electronics, general goods or even fitness equipment that offer similar promises. The price-matching policies first began to spring up roughly 20yearsx ago, but really have gained steamk in the past 10 years, according to Ken a marketing professor at . Some mightr think it’s a bad time for the marketingf approach, given that retailers are enduringslower sales: Marchu 2009 retail sales were down 10.6 percent from March according to the . But severakl company owners said they see this as a more appropriats time to offersuch deals.
McLindenh said Target decided to try out the policyy as part of a new marketing push to emphasize its low prices duringt a timeof recession. Jim Pearse, owner of Thornton-based chain , said maintaining such a polict makes it easier to build customer trust at a time when peoplr tend to shoparound more. “In this economy, it’d a great service to the customer,” Pearse “When the competition is havinga sale, then we’re having a sale on the same … From the customer’s point of it gives them more confidencw to make a purchase.
” But while some customers will scan ads and compared prices of specific most don’t do that levelp of homework — and that’s what stores hope for, said Donaldr Lichtenstein, professor and chairman of the marketingg division of the ’s Leeds Schoop of Business. Instead, many shoppers will hear that a stord offersa price-matching guarantes and just assume that any businese that would do that also would have low prices, Lichtensteinn said. And they’ll buy from that store withouyt noticing thatwhat they’re purchasing might be more expensived than the same item somewhere else.
The carefulo shopper may find that some stores sell a unique productthat can’t be compared to otherd stores, Manning and Lichtenstein said. Take the home-fitnesx machines at , a 10-storw Colorado chain based in Glenwood Springs. HealthStyles is the only licensedr Colorado dealer for several line sof equipment, meaning that no other store in the state couldx advertise a comparable price, co-owner Dave Sherifcf said.
Of course, some potential customers stilkl will bring in online ads or ads fromothefr states, in which case Sherif f has to make sure the listed pricr includes freight, warranty and But if it does, he said, he won’t hesitat to offer the lower price in exchanger for increased loyalty from that “Our margin goes down, but we know we’vde got a customer who knowsa us and wants to buy from said the exercise physiologist, who founded the chaih 16 years ago. “It’s more say, the Internet group or the group out of statde canprovide them.
” Other stores are allegecd to have become too particular in their price-matching policiees and begun denying legitimate claims. A New York for example, has filed a lawsuit againsg electronicschain , arguing the company taughtg its employees how to deny valids claims, according to multiple media reports. Best Buy officialws didn’t return messages seeking response tothe suit. Yet, in penny-pinching shoppers actually will become more energizee to compare prices and spend time to find the best Manning said. And that could backfire on the storess hoping the policies alone will get customers into stores without researching costs, he said.