If you are an independent retailer you have been asked this question a thousand times.
I was recently asked by a regular customer on Facebook. Knowing that a thousand plus people were going to read my response, here is what I said:
This is a tough question to answer. I could just say no and leave it at that. I used to say, “No, because they don’t match our services.” But some might look at that as a bit of arrogance.
For the sake of everyone who might read this, I want to give an explanation of why we don’t match prices because I think it might be an eye opener for shoppers to understand what goes into a decision like this for a store like us. It is a tough decision that we do not take lightly.
We used to match prices but over the years a few factors have come into play that made it difficult.
First it was the ads for products that the store never had. Target was notorious for running ads with prices below cost of stuff that was never in their store. Yet we had plenty of stock and lost money on everything we sold matching their “price”.
Then there were stores that didn’t offer any of the services we offer like layaway, giftwrap or a knowledgeable sales staff. All of which cost money. With a lower overhead they (sometimes) offered a lower price.
Now, with the Internet there are warehouses in low tax locales, paying minimum wage to a small handful of employees to stuff boxes. They don’t have the overhead of a brightly lit sales floor, or trained and compensated sales staff. They don’t have to pay the same city/county property taxes, state business taxes, city & state income taxes, etc. (which means they do not contribute to your local fire and police) They don’t have to collect MI sales tax so they advertise it as “tax-free” even when it is not (and by not collecting that tax they don’t help the state get the money it needs for education and roads, etc).
So our choice is to either offer to match prices, but in the process drop all the services that cost money, hire fewer staff and pay them less, or to stop matching every price and keep doing business the way we believe it should be done, by offering incredible services and experiences for our customers, by getting them the right products at a fair price, one that is reasonable for the product, covers our overhead, keeps my staff employed and puts food on everyone’s tables.
That’s the route we have chosen.
Whether it works for us in the long run, whether customers see any value in such services and such a stance is the gamble we have to take. But I believe it is worth it for my customers, my staff, and my community.
Thanks for the opportunity to explain. I apologize if that was way more information than you needed:-)
What are you saying?
PS Oscar Wilde said it a long time ago and it is still true today. “Many men know the price of everything and the value of nothing.”