Consumers always look for a product with the maximum benefit to save on price without sacrificing the product quality. Online stores and retail outlets offer many ways to save here: discounts, sales, etc. One of such a promotion can be Price Match Guarantees. Such guarantees are common in retail practice. Let’s see how you can enhance your store marketing strategy with this feature.
What is Price Matching
Price-matching guarantees are offers to match a competitor’s price on a specific item. The promotion guarantees the price for a certain product is lower than that of competitors. Depending on the retailer, customers can request the price match online and/or in-store. Some large retailer brands offer to match the price even if the item is bought. When adjusting the price, these stores give a rebate – refund the difference in price but not higher than a certain percentage specified in their Terms and Conditions and within a certain amount of time.
Types of Price Matching
Price matching programs may have different names. Regardless of the industry, be it retail or HORECA, the meaning remains the same. For example, Hilton calls it Price Match Guarantee (PMG), Marriott – Best Rate Guarantee (BRG) or Look No Further (LNF), IHG and Accor – Best Price Guarantee (BPG), while Radisson names it Best Online Rates Guarantee (BORG). Let’s determine the essential types of price matching and what is hidden under each type name.
Best Price Guarantee
or promise of the lowest price. Here, your company is meant to be the cost leader on the market and is sure that none of your competitors can beat your offer.
The type introduced by Sainsbury’s, a British retail company. The price level is analyzed based on prices offered by major retail chains (Sainsbury’s compares its stock with ASDA and Tesco). They use a special tool – BrandView – an independent source of up-to-date information on prices and current promotions. If the comparison results in Sainsbury’s prices being higher than those of the competition, customers receive a voucher for the difference, which they can cash out on their next purchase.
Price Match Policy
The company doesn’t offer the lowest price, it just states that if the customer finds a better price, the company will match that price. It is usually indicated in the Company Policy and is not so evidently exposed on the site.
Pros аnd Cons of Introducing a Price Match Policy
Price Match Guarantee has its perks and downsides.
Here is why we recommend leveraging Price Match Guarantee:
- Generate demand. The goal of the Price Match Guarantee strategy is to drive interest and attract potential customers. The customer is sure that a product with the same purpose and quality is not more expensive than that of competitors. This is how a loyal customer can be bound to your brand. With Price Matching you inspire confidence in your brand, acquire new and retain old customers.
- Stand out among competitors. Not every store is capable of guaranteeing the actual best price. The easiest way to do this is to shorten the product path “from manufacturer to consumer” as much as possible, eliminating intermediaries and additional costs: renting warehouses and retail space and paying salaries. One can achieve this using an eCommerce platform to sell products online and save on cost. This allows offering your customers lowest product price.
- Define your price. Knowing what price your competitor has you can offer a lower price provided that your margin is still higher than the product cost. The price match guarantee strategy is great to start with when looking for a way to be more competitive in your market.
- Attract vendors. In terms of choosing your business model, the marketplace does not only guarantee the customer the best prices, but it also is beneficial for the sellers. There is no need for advertising price matching – this function is taken over by the marketplace owner. It is enough just to keep the information about the product up to date.
Cons of Price Match Guarantee:
- Price wars. While declaring a price lower than that of competitors you defy the market. It can entail ongoing wars capable of weakening your company.
- Product margin degraded. Don’t set the price lower than its cost, otherwise it might affect the margin. If you fail to do that, your company is likely to experience financial problems.
- Lost customers if Price Match Guarantee rules were not met.
Apply Price Matching wisely in order not to worsen your marketing strategy and the overall business reputation.
Price Matching Examples
Let’s see examples top US and UK companies using Price Matching strategy.
Below are some Price Match Guarantee examples of major US retail brands:
|Price Matching Type||Best Price Guarantee||Brand Match||Best Price Guarantee||Best Price Guarantee||Price Match Policy|
|Policy||It changes pricing strategy to keep a reasonable price across the market.The policy is limited to products found on Walmart.com and Jet.com||It matches prices in store creating competition among more than 25 companies like Amazon, Sears, Kohls, and others||It can refund prices even if you found a lower price at the competitors’ website. Refunds may include shipping fees as well. The policy is amended overtime to include more conditions when Price Match is not applicable.||It refunds the difference in the price of a product found online or at the competitor’s store.||A purchase must be made on Amazon, and not from a vendor who sells on this platform.|
|Price Match Adjustment Period||7 days||14 days||30 days||15 days (30 days, for premium members)||7 days|
And here are some examples of the Price Matching strategy in the UK
|Price Matching Type||Best Price Guarantee||Best Price Guarantee||Brand Match||Price Promise|
|Policy||It compares prices for branded items and comparable store brand items offline and online.The list of brands includes Morrisons, Sainsbury’s, Tesco and Waitrose. ASDA compares different size items.To get a voucher, you should enter your receipt details online and print the voucher. Vouchers are given if ASDA is not more than 10%.||It compares branded items and comparable store brand items found online.Up to a 50% difference can be refunded. Prices are adjusted to account for size differences.Vouchers are automatically sent by email if Ocado is not the cheapest.||Items can be refunded if bought in store only but not in convenience or local stores. Up to 10% of the difference can be refunded.Prices are adjusted to account for size difference but this is not mentioned in the terms and conditions.Vouchers are automatically given if Sainsbury’s is not the cheapest.||Tesco compares branded items and comparable own-brand products found in store and online (with the exception of Express stores). Vouchers are given automatically (via email or at till)|
|Price Match Adjustment Period||28 days||14 days||14 days||28 days|
Price Matching Ideas for Consumers
These ideas can help not only customers, but store owners forming the Price Match rules:
- Do research, study the company policy. Not everything is clearly exposed on the website. You can find out whether the store offers Price Match and Price Adjustment in the Pricing, Terms sections, FAQ, Help and Support sections.
- Submit an online application form. Typically, this form is available in the Help and Support sections. In case you didn’t receive an answer, try to use other ways to reach the store. If the site has no form to claim online price matching, send a request by email to the store’s support service.
- Check whether the product fits the promotion. Verify if the item has the same name, size, model or flavor. Other features to check:
- Presence of a store in the list of competitors for your region
- Configuration (what is included in the product)
- Product availability in store or the possibility to bring it to a store specified in the Terms and Conditions of the promotion
- Belonging to a “forbidden” brand (for example, some stores do not want to sell Gucci and similar brands at a discount)
- Presence/absence of discounts and bonuses in the product price
- Defective item or a product sample
- Show the proof. Take a flier with you and have the required items rounded. Inform the personnel about coupons (vouchers) you have.
- Take a flier with you to show the proof
Mistakes to Аvoid When Matching the Price
For store owners, Price Matching feature can do both: bring more customers and cut the income. It all depends on how you prepare your store for promotion. Always state Terms and Conditions for price matching on your website.
Include everything that may limit the price matching adjustment: open boxes, location of purchase or something else. Do research of the best practices with the price matching examples mentioned above and find something that fits your business best.
What can you include in the Price Match Guarantee Terms and Conditions:
- The product name matches 100%.
- The product is absolutely identical to what the customer wants to buy, even in minor details (the final price often depends on the color or product completeness).
- The competitor’s low-cost product is not a defective item or a sample product.
- Competitor’s price doesn’t include discounts or bonuses.
- A store with a low price is included in a specific list of competitors (which can be different depending on location). The competitor should be located in the same city as the store with the promotion.
- The product is not a service, a digital code or a contract with a service provider.
- Period of adjustment. Customers can deliver the items within a certain period (from 7 to 28 days or more).
- The discount after comparison does not exceed a certain percentage. If it is larger, then the promotion is invalid, and the customer will have to pay the full amount.
Apps and websites that make price matching easier
There are lots of apps that work with the Price Match Guarantee concept. Usually, such sites offer comparisons of products of the same category but across different stores. For example, for the grocery category, the following apps can help in price matching:
- Price Cruncher
If you are looking for a travel cost saving app, you’ll probably go to:
Independently of the app category, all of them act as aggregators of eCommerce sites with their listed items, to then show this data in one place and provide you with the best choice.
Price Forming Insights
If you are an eCommerce site owner, you’ve probably considered the idea of price matching. However, you may not be sure whether it fits your business. Business owners often ask our insights on price forming. How to set the price lower than competitors’ but higher than the margin? Usually, these are D2C companies capable of offering the lowest price, but not very sure about what price to put under the product image.
For those cases we offer a version of the Price Match Guarantee feature – Request for Free Quote (RFQ). The solution will allow your customers to create a quote request at checkout. In the request, customers may indicate conditions: the desired price/or the competitor’s price. You receive the offer and decide to accept/reject it or make a counter-offer. A flexible pricing takes into account customer requests, forming the best price offer and increasing your customer base.
What you get:
- A fast and easy way to learn price expectation of your customers and offer the best price
- Insights about the competitors’ prices
- Higher revenue as a result of flexible pricing and increased amount of customers
- Brand loyalty due to personalized offers