In a bid to increase their market share this season, big retailers are going to offer extremely competitive pricing, free shipping, consumer come-ons, and "price-matching" programs (by the likes of Walmart, Staples, Target, Sears, Best Buy, Home Depot and Lowe's). There's "much more promotional intensity and gimmicks" among competitors this season, notes Walmart's chief merchandising officer, Duncan Mac Naughton (investors.walmartstores.com), in "Price matters for holiday 2011 season," by AP Retail Writer, Anne D'innocenzio.
Retailer JC Penney says they're overhauling their pricing strategy starting in February, but is tight-lipped about their plans... an interesting approach considering that the holiday season may provide 40 percent of a company's yearly sales!
"...Amazon doesn't price-match with other retailers..." says an Amazon spokesman. "However, (we) consistently work toward maintaining competitive prices on everything we carry." Translation: With our technology and ability to compare prices 24/7 on thousands of competitors and millions of items, we can undercut everyone at the touch of a button, so we don't need to get into price matching.
Each retailer has a slightly different price-matching program, including "discretion" to accept or deny price-match requests. To claim these benefits, the consumer has to know the details of the specific program, do the legwork to find and compare prices, and wrestle with model and sourcing numbers which vary widely among manufacturers and retailers (purposely making it difficult to verify and compare identical items). Consumers who succeed are then given a rebate, credit, or coupons that must be used in that store's outlets.
The consumer will obviously benefit the most from the ever-escalating competition and ever-downsized prices, free shipping, price matching and other come-ons. "There's no question consumers are eager to hit the web this holiday season, and online retailers are prepping by optimizing their sites, beginning their marketing and promotions early and planning plenty of free shipping promotions," said the head of research at Shop.org.
Image above: infographic via afterhours.e-strategy.com
A reason for local retailers to worry is that, according to ShopperTrak, foot traffic in malls and brick-and-mortar stores is projected to drop 2.2 percent during this holiday season compared with a year ago. That translates to millions of consumers increasingly using online retailers. Indeed, 68 percent of e-retailers say they expect online sales will increase 15 percent or more this season -- up from 64 percent who said this a year ago!
There's a lot of transparency these days to find out what competitors are doing online and off. The big retailers hope to increase traffic and customer loyalty that will translate to sales. Savvy e-retailers with the right tools and prices can compete with the big boys to get their own share of consumer attention and sales but they need to start early, be very aggressive and make sure they are aware of their competitive environment at all times.
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