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October 22, 2012

Purdue expert: Retailers use price matching to fight 'showrooming'

WEST LAFAYETTE, Ind. - With the holiday season approaching, retailers are using price matching to actively fight "showrooming," which is when consumers come into a store to benefit from sales staff expertise and then buy online, says a Purdue University expert.

To combat showrooming, retailers need to match pricing online as well as in competitors' brick-and-mortar stores, says Richard Feinberg, a professor of consumer science and retailing.

"Retailers know that they are better off making less profit on the merchandise than losing the sale completely," Feinberg says.

Offering to price match attracts the most price-sensitive consumers, Feinberg says. "And our research suggests this improves brand image, even if the consumer doesn't make use of the price match."

He also says research shows that more than half the time, consumers who use price match buy other items that don't qualify for price match. That tendency helps retailers recover the cost of the price match.

Feinberg offers two cautions to consumers:

* Read the fine print. Some price-matching policies are restrictive, and a slight variation in a product may disqualify it from a price match.

* Some retailers don't advertise price match. The only way to find out if it is offered is to ask. In fact, he says, retailers are so anxious to keep customers that they may agree to a price match even if it isn't policy.

Writer: Judith Barra Austin, 765-494-2432, jbaustin@purdue.edu

Source: Richard Feinberg, 765-491-5583, xdj1@purdue.edu