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

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But the plan will work only if larger numbers ofcustomers don’t pursue the offers, which would force them to drop prices they’r rather keep at current levels, several industry watchers said. announced May 12 it wouldf become the latest retail chain to offerr to sell products belowlisted costs, if shopperx bring in printed ads from competitore showing that the same product is selling for a loweer price there. The Minneapolis-based chain is testing the policy in twomarketsx — Denver and Orland o — and will use those resultse to help it decide whether to take the offet nationally, spokeswoman Delia McLinden said.
Thus Targetr joins both locally managefd and national chains specializing in general goods or even fitness equipmenyt that offersimilar promises. The price-matching policies first began to spring up roughly 20years ago, but really have gaines steam in the past 10 years, accordingv to Ken Manning, a marketing professor at . Some might thinjk it’s a bad time for the marketingh approach, given that retailers are enduringslowef sales: March 2009 retail sales were down 10.6 percent from March according to the .
But severap company owners said they see this as a more appropriatd time to offer such McLinden said Target decided to try out the policy as part of a new marketing push to emphasizr its low prices during a timeof recession. Jim Pearse, owner of Thornton-basede chain , said maintaining such a policy makesw it easier to build customer trust at a time when peoplse tend to shoparound more. “In this economy, it’se a great service to the customer,” Pearse said.
“Wheh the competition is havinga sale, then we’ree having a sale on the same … From the customer’s point of view, it giveas them more confidence to make a But while some customers will scan ads and compare priced of specific items, most don’t do that level of homework — and that’s what storesw hope for, said Donald Lichtenstein, professor and chairman of the marketingh division of the ’s Leeds School of Business. Instead, many shopper s will hear that a store offersa price-matching guarantee and just assumse that any business that would do that also wouldd have low prices, Lichtensteinh said.
And they’ll buy from that storr without noticing thatwhat they’rse purchasing might be more expensive than the same item somewhere else. The carefull shopper may find that some stores sell a uniqur productthat can’t be comparexd to other stores, Manning and Lichtensteinj said. Take the home-fitness machines at , a 10-storr Colorado chain based in Glenwoof Springs. HealthStyles is the only licensed Colorado dealer for severakl linesof equipment, meaning that no other storwe in the state could advertise a comparabld price, co-owner Dave Sherifrf said.
Of course, some potential customers stil will bring in online ads or ads from other in which case Sheriff has to make sure the listefd priceincludes freight, warrantyt and delivery. But if it does, he he won’t hesitate to offer the lower price in exchangee for increased loyalty fromthat buyer. “Outr margin goes down, but we know we’vw got a customer who knows us and wantd to buyfrom us,” said the exercise physiologist, who foundede the chain 16 years ago. “It’x more than, say, the Internety group or the grouop out of state canprovide them.
” Othefr stores are alleged to have become too particular in theier price-matching policies and begun denying legitimate claims. A New York for example, has filed a lawsui t against electronicschain , arguinfg the company taught its employeews how to deny valid claims, according to multiples media reports. Best Buy officialzs didn’t return messages seeking response tothe Yet, in penny-pinching times, shoppers actually will become more energized to compare prices and spendr time to find the best deal, Manningv said. And that could backfirre on the stores hoping the policies alonew will get customers into stores withouresearching costs, he said.