AllBusiness.com
Store shelves

Walmart's New Price-Match Push Pressures Small Businesses

Pricing & MerchandisingLegacy

In an effort to win back its steadily declining customer base, Walmart launched a new "price match" ad campaign designed to restore consumer trust that the mega-chain really does offer the lowest prices available on everything it sells. The company worries that outlets like Amazon.com and rival dollar stores have been undercutting its pricing, and negatively affecting consumer perception of Walmart as the place to find "it" for the cheapest price, always. Duncan McNaughton, Walmart's chief merchandising officer, told the Associated Press, "We have lost our customer confidence … in having the lowest price."

The new campaign features five TV commercials and hammers home Walmart's new slogan: "Low Prices. Every Day. On Everything." Pretty direct, although it doesn't go so far as to say "The Lowest Prices." But the company hopes this messaging will help to restore the store's image as the nation's "rock-bottom" retailer, and Walmart plans to phase out the bland slogan it has been using for the last few years: "Save Money. Live Better."

The first commercial in the new campaign focuses on the "ad match" guarantee. When a customer points out to the cashier that a rival store is offering the same product for 20 cents less, the entire staff leaps into action, chanting, "Match it! Match it!" The company is, in fact, directing store employees to familiarize themselves with competitors' advertisements so staff members are aware of what's for sale at other stores and how much it is going for.

I'm sure it's a simple thing for each cashier to constantly monitor the current prices of all products offered by all competitors, and to keep those numbers straight in their head at all times. "You know, I was reading their flyer last night in bed, and I'm almost certain that Best Buy is charging five cents less for this iPod case. Let me match that for you, ma'am."

More articles from AllBusiness.com:

So what does this mean for small business owners? If you're a small independent retailer, can you really consider a behemoth like Walmart your competition? It's safe to say that few non-corporate stores can engage in the kind of price slashing that stores like Walmart and Target engage in, which is possible due to the enormous quantity of products they are able to purchase. The AP piece (very accurately, in my opinion) states that Walmart's uses its price-match policy as a "weapon to compete with rivals."

If customers are always going to get the lowest price at Walmart, there's really nothing you can do to compete with the company's pricing. What you can do, and must do, if your shop has the distinct misfortune of being located within driving distance of a Walmart is to play to your strengths as an independent small business. What can you offer customers that a place like Walmart and Target can't?

Be creative. Make your store a place people want to visit not just to make purchases, but because it’s a pleasant environment to spend time in. Create a welcoming shopping environment that invites customers to linger, to browse and maybe find something they didn't expect to buy when they entered. It sounds cliched but give them the "personal touch"—it really is your own best weapon to counter the big-box competitors. Practice customer service that is more about developing a relationship with people who enter your store than it is about "moving product." Hold in-store parties—wine tastings, readings, special events—to build a sense of community around your shop and help positive word-of-mouth serve you better than any expensive advertising campaign.

Of course, there are some people who will only ever shop at stores like Target and Walmart, and, on the flip side, there are folks who won't set foot in stores like that. But most customers shop in different types of stores for a variety of reasons: price, convenience, selection, atmosphere. Recognize which areas you can compete in, and devote yourself to making your store as welcoming as it can be. If Walmart's new slogan is "Low Prices. Every Day. On Everything," make yours "The Best Shopping Experience. Every Day. For Everyone."

Hopefully, Walmart will not bring back that annoying (and clumsy) flying smiley face that couldn't seem to make it through the store aisles without bumping into every sign, littering the floor with stray numbers. Who had to clean up after that guy?

RELATED: When Walmart Invades: The Independent Retailers’ Survival Guide