Wal-Mart Stores Inc. is considering an online price-match program as part of its strategy for the holiday shopping season.
During a conference call Thursday to unveil how the world's largest retailer is planning to attract its share of the $616 billion projected to be spent by holiday shoppers this year, executives hinted at the possibility of an online price match to complement what it is doing in stores. Wal-Mart began Savings Catcher, an in-store price match program, in August and has allowed store managers to use discretion in matching some online deals.
More than 5 million customers have participated in the Savings Catcher program since it began. Savings Catcher allows customers to input receipts online, and if Wal-Mart finds items at a cheaper price, it will refund that money onto a gift card.
Adding online price matches can be difficult for retailers, but the policy could benefit Wal-Mart as it continues to fight increasing competition from smaller discount stores and large online retailers.
Steve Bratspies, executive vice president of general merchandise for Wal-Mart U.S., said the online policy is under consideration, but no final decision has been made.
"Our store managers have always had flexibility to do what they think is right," Bratspies said. "If they've wanted do that in past, they could. We're considering it right now on a broader basis."
Target Corp. and Best Buy Co. are among the major retailers currently offering online price-match programs. Both companies established the online price-match policies in 2013.
Stephens Inc. retail analyst John R. Lawrence said exploring a price match online makes sense for Wal-Mart as it considers ways to set itself apart from more established online competitors such as Amazon.com Inc. Wal-Mart announced last week it was investing an additional $1.2 billion to $1.5 billion into its e-commerce division for the coming fiscal year.
"There's no question online is growing," Lawrence said. "They're seeing some real positives, and they're spending a lot of money in developing online business. They've seen some success. I'm certainly not far enough along in knowing their plans to talk specifics about price match, but the one thing I'd ask is, are they seeing enough out of the Savings Catcher in-store?"
While Wal-Mart continues to evaluate its Savings Catcher program and how it could be implemented online, the company does have key pieces of its holiday strategy in place. Additional details for Black Friday and Cyber Monday will be released later, the company said.
Customers will begin to notice a shift to more holiday-themed decor and merchandise in stores Saturday, the first day of November, the company said. At the height of the holiday shopping season, the retailer will offer 7 million items online, 1 million more than this time last year. Included in the holiday plans are price rollbacks on 20,000 items, which the company said is double the amount of discounted items its stores typically carry.
Wal-Mart also announced Thursday that it will offer free shipping guaranteed by Christmas Eve on any order over $50. Free shipping also will be included on orders that include what Wal-Mart labels as its "Top 100 Gifts."
Research from the National Retail Federation projects holiday spending to increase 4.1 percent this year. That's up from an average annual growth of 2.9 percent over the last decade and a sign that the consumers are feeling more confident in the economy, federation spokesman Katy Grannis said.
Total holiday spending is projected to be $616.9 billion, including $105 billion online from this Saturday through Dec. 31.
As holiday shopping becomes more competitive, Grannis said it is important for retailers to have a strategy on how they'll attract customers. Not only do customers want to see discounted items, they are looking for value during the holiday season, which can account for as much as 30 percent of a retailer's sales.
"It's extremely important for companies to plan in advance and really try and prepare for what is inevitably the most promotional time of year for them," Grannis said. "These promotions being announced are part of that plan. They aren't the panic discounts we might have seen a few years ago when recession was at its worst."
Wal-Mart noted several times during its Thursday call that it was not only offering discounted merchandise, but was beefing up its emphasis on brand-name items.
Delivering on its promise to improve front-end service also will be key for Wal-Mart during the holiday season, Lawrence said. Wal-Mart recognized last year that it was understaffed at its registers and publicly stated its goal to have all checkout lines open for customers during peak shopping hours.
While not all 60,000 seasonal hires by Wal-Mart are related to the checkout promise, the additional manpower is a plus for Wal-Mart during the holiday season. Knowing the retailer is investing in more help should be viewed as a selling point for customers.
"Customers are going to look at the price itself, but that's not all of it," Lawrence said. "They want to know what sort of service they're going to receive in-store or what sort of delivery options they have available. Wal-Mart has said they're going to increase labor and I think that should help with better service after maybe they'd lost a little bit of ground there. We're seeing and hearing some positive things from them."
Business on 10/31/2014