More on "ShowRooming"-The fight against online retailers

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1/09/2013 @ 1:38PM |1,808 views  Forbes http://ow.ly/gICq6

Target's New Price Match Arrow Headed Straight for the Showrooming Bullseye

On the heels of a holiday selling season fraught with retailers trying to best each other on prices, Target’s announced it will implement a year-round price match program. Target’s Price Match Guarantee takes direct aim at such e-commerce competitors such as Amazon.com as well as brick and mortar stores rocked by consumer’s comparison shopping (better known as showrooming) likeBest Buy as well as local retailers.

Target’s plan is to combine its previous efforts to offer the lowest cost on items by refunding the difference for products that go on sale soon after the original purchase as well as matching rivals’ advertised sale prices. Consumers have 7 days to contest a price on purchases made on Target.com.

Target’s CEO Gregg Steinhafel touted an additional advantage for dedicated customers who participate in the retailer’s REDCard loyalty program. “We know that our guests often compare prices online. With our new Price MatchPolicy and the additional five percent savings guests receive when they use their REDcard, Target provides an unbeatable value.”

Steinhafel hints at the challenges faced by Target and most other brick-and-mortar chains in the wake of competing e-commerce giants like Amazon. Consumers are often comparison shopping right in the store thanks to their smartphones. As a result, recent industry research conducted by the Edgell Knowledge Network (EKN) and eBay Local found that eight in 10 retailers expect such showrooming to average about a 5% loss of sales during the 2012 holiday season.

The takeaway from the research indicates that “price-matching needs to go from a policy decision to a transaction value decision – i.e. what is the value of this transaction in the context of the lifetime value of the customer,” a bullseye Target will hit with its RedCard customers and the additional 5% discount per purchase on their card.

REDCard holders also get free standard shipping on purchases made on Target.com. without a fee. While it’s not exactly Amazon Prime in that it doesn’t extend into streaming movies or Kindle Books, it doesn’t carry a $79 price tag per year, either.