Price Matching Ain't What It Used to Be

Once upon a time, when retailers distinguished themselves primarily on price and selection, price matching enabled them to reassure customers they were the best place to shop. “More than a hundred years ago, [the] Sears catalog promised the lowest prices on its goods … Macy's in the early 20th [century] was also a price cutter and promised the lowest prices,” said Vicki Howard, visiting fellow in the Department of History at the University of Essex. Amazon doesn’t offer price matching, but as recent figures show, it dominates nearly half of the U.S. ecommerce market—thanks at least in part to Prime and all of the benefits it affords—and really doesn’t need to. Retailers like Target and Walmart, however, do offer matches as they vie for competitive advantage. So does ecommerce company eBay, which recently upped its price match guarantee for U.S. shoppers from 100 percent to 110 percent. That means customers who find eligible items for less on approved competitor websites can contact eBay within 48 hours and get an eBay coupon for 110 percent of the difference. There are a few catches. First, both items must be exactly the same and currently in stock. Second, the exactly-the-same-and-in-stock-item-purchased-within-48-hours must come from one of these approved competitor sites: Amazon, Best Buy, Home Depot, Jet, Sears, Target, Walmart or Wayfair. Finally, eBay has to confirm the customer followed these rules in order to be eligible for its Best Price Guarantee. And, as if that weren't enough, the resulting eBay coupon expires in 30 days. “We see shoppers wanting to save more and, after a year of Price Match Guarantee, we wanted to expand and ensure we’re offering the most competitive prices," an eBay rep said. To be fair, Target and Walmart have similar restrictions, although Walmart offers a wider range of sites and Target gives shoppers 14 days to find a match. But, in eBay’s case in particular, it seems like a lot of trouble, particularly for a platform eager to convince the world it still deserves a seat at the ecommerce table. From 2009 to 2014, eBay ranked third (after Amazon and Walmart) among consumers' 50 favorite ecommerce sites, at least according to research from the National Retail Federation. Best Buy bumped it one spot to No. 4 in 2015, and it held steady there in 2016. (An NRF rep said it discontinued the survey as the industry is spending less time talking about online channels and more about boundary-less retail.) But, anecdotally at least, Amazon and, to a lesser degree, Walmart continue to dominate the ecommerce conversation in the U.S. Meanwhile, eBay says it has 171 million active buyers and 1.1 billion live listings. But, in an era arguably defined by Amazon’s customer-obsessed philosophy, it seems unlikely a cumbersome price match will help it gain any ground. “Price match guarantees have been common at least since the 1980s … not new, so not much to get excited about from the consumers' point of view, I think," Howard said. Gary Nix, chief strategist at the consultancy The Brandarchist, noted the historic nature of price matches are based on convenience, familiarity and experience, especially for brick-and-mortar stores. “If access to another store was difficult for a consumer, a more familiar store breaking that barrier was beneficial for both the buyer and the brand,” Nix said. When barriers are removed through the introduction of technology like eBay, access increases and the choice of experience becomes paramount, he added. “This is not to say price match is a bad idea,” Nix said. “It is to say, however, that they will need more than that to put a dent in Amazon's or anyone else's user base.” Indeed, Emily Wengert, group vice president of user experience at digital marketing agency Huge, said price match is only useful for customers in stores who are about to walk away to get a product somewhere else. “If I’m comparing digital properties and spot that Amazon is cheaper, why would I go through the process of requesting a price match when I could just get the thing at the lower price without hassle at a site I already have frictionless commerce with?” she said. Forrester analyst Sucharita Kodali said she sees price matches working best in stores. “I haven’t heard of price matches being as effective online mainly because it’s a more cumbersome and less immediate process,” she said. “It’s nice, reassuring marketing but not the best way to win share online.” And, Joe Migliozzi, who leads the Shop+ unit for WPP’s Mindshare in North America, noted that consumers now typically start their purchase process on sites where they’ve made purchases before. And, currently, 55 percent of consumers start product searches on Amazon. Migliozzi said customers will give eBay’s price match a try if they have not before, but only if they hadn’t previously associated eBay with the best price. "They may start their purchase research elsewhere but if there are challenges with closing the purchase like it being out of stock, they would be open to trying eBay," he said. "The effectiveness of this tactic would be dependent on the experience that the new customers have on eBay once they get there—if it is positive, they will return."