NEW YORK -- Target said Tuesday that its pledge to match pricesof select online rivals this past holiday season is now a year-roundpromise.
The nation's second largest discounter behind Wal-Mart Storessaid it will match prices that customers find on identical products attop online retailers, all the time. The online list includes Amazon.com as well as the websites of Wal-Mart, Best Buy, Toys R Us and Babies R Us.
Target's holiday price match program with online retailers began Nov. 1 and ended Dec. 16. Targetis also making permanent its holiday offer of matching prices of itemsfound at its stores with those on its website. And for the first time itwill include products that are out of stock on Target.com.
The company's stock price closed at a record $61.30 a share and was 0.7% lower in Tuesday trading.
Themoves follow a disappointing holiday shopping season for theMinneapolis-based retailer, hurt by stiffer competition from onlinerivals and stores like Wal-Mart that have hammered its low prices.
It'salso the latest step from brick-and-mortar stores to combat"showrooming" - a growing trend for customers to browse their stores tocheck out products, and then go online to buy the same products for lesselsewhere.
Mark Schindele, Target senior vice president ofmerchandising operations, noted the discounter monitors prices of 30,000items, and thousands more online, to make sure it's competitive. ButTarget says it had to do more to give shoppers more confidence.
"Webelieve that our prices are competitive year round," Schindele said inan interview. "We also know that our guests shop in many ways."
Manymajor stores have offered price matching guarantees for localcompetitors' brick-and-mortar stores, but it wasn't until this pastholiday season that the focus was on matching online prices. That can bedifficult, since online prices tend to be lower and fluctuate often.
BestBuy is matching prices with 20 online retailers on electronics andappliances at its physical stores through Jan. 31. Best Buy spokeswomanAmy von Walter declined to "speculate" on whether it would make thatplan permanent.
Since last summer Toys R Us has been matchingonline prices for all identical items or models of baby gear merchandisefrom selected national competitors like walmart.com, target.com,sears.com, Amazon, buybuybaby.com and diapers.com. Like Target'spolicy, it excludes Amazon's third-party Marketplace items.
Wal-Mart has trumpeted its low price message but stopped short of matching prices with online rivals.
JoelBines, managing director and co-head of the retail practice atAlixPartners, praised recent moves by retailers to have an onlinepolicy.
"Retailers have finally gotten the message," he said. "Youcan't put an impediment between consumers and consumption." But he saidthat the policies can backfire. Stores have to make it easier forshoppers to get the price match. And he noted the move could also turnout to be "profit draining" as more people are encouraged to shop theWeb to get the lowest price.
Bines and other analysts say theonline price match policies are also tough to implement given theconstant fluctuation of online prices, even in the same day. That wasparticularly evident around Thanksgiving week. From Nov. 19 to Nov. 30Amazon.com doubled the average number of promoted products it changedprices on each day compared with the same period a year ago, accordingto Dynamite Data, which tracks online prices.
Still, having aprice match policy in place is essential for cheap chic Target, analystssay. The discounter, known for selling trendy merchandise and stapleslike toothpaste under the same roof, has seen uneven sales growth sincethe economic downturn as it tries to convince frugal shoppers it hasgood prices. This past holiday season, Target chose to limit promotionsto preserve profits. That resulted in muted sales in November andDecember. However, Target expects fourth-quarter earnings to meet orpossibly top the low end of its previous outlook.
As for theholiday price match plan, Schindele noted that shoppers like the plan.Price matches may be requested at Target's guest services desk prior topurchase, with proof of an online competitor's current price or afterpurchase with the original Target receipt and proof of the lower onlineprice.
"This has been a seamless experience," Schindele said. "There have been a lot of positives."