Price is always a key consideration for consumers when they make a purchase, and price matching helps retailers retain their customer base by keeping their prices in line with competitors.
In the UK, Morrisons is the latest retailer to launch a price matching scheme, targeting both Aldi and Lidl: two retailers well known for their lower prices. However, it is by no means a new practice, and has been used by retailers consistently.
Price matching is when retailers offer to match - or even beat - the price of certain products that are currently offered at lower prices elsewhere. In turn, this helps retailers retain their customers, as they can still get products at affordable prices rather than with a competitor.
Retailers might not even highlight the price match to customers, and could simply lower product prices as part of their ongoing competitive pricing strategy. However, some retailers like Sainsburys, Asda, and the aforementioned Morrisons, will highlight their price matching campaigns in an effort to show their commitment to offer the best possible prices for key products. On their websites, this could be shown as a dedicated category containing all of the price matched products.
Retailers implement price matching for several reasons, including:
By offering to match or beat the prices of their competitors, retailers can attract more customers, and then increase their market share. Additionally, an effective price matching strategy allows a retailer to build customer loyalty. This is because existing customers are more likely to purchase products at the lower prices, but it is still, essentially, the same product they have bought previously.
Price matching can also serve as an effective marketing strategy for retailers as it helps to create a perception of trust and transparency with both new and existing customers. Dedicated price match schemes help to enhance a brands reputation as it shows an awareness of the industry while showing the company is not afraid to learn from competitors and do what is best for customers.
Price matching offers numerous benefits for consumers, and retailers can tap into these when forming their own price match strategies.
Firstly, it saves a consumer time and effort on their shop. Instead of visiting multiple stores or websites to compare prices, consumers can simply find the lowest product price with their preferred retailers or grocer. This convenience allows consumers to make an informed purchasing decision without the need for excessive time on research.
Secondly, price matching will help consumers save money on their shopping due to the lower prices. This can mean significant savings for a customer, or alternatively it could mean additional disposable income which can turn into an impulse purchase during the same shop. For example, if core groceries such as rice, pasta, bread, and vegetables are offered at a lower price with their chosen retailer, they may be more inclined to spend money on other products as part of their shop.
Price matching is a valuable practice for both retailers and consumers. It helps retailers stay competitive, build customer loyalty, and broaden appeal to new customers. For consumers, it offers convenience, savings, and peace of mind.
By understanding and forming an effective price matching strategy, retailers can bolster their own offering, improve their positioning, and capture additional market share in their industry.