Business Alteration of a Major Customer Benefit Offered by Corporation Target
Target, the popular retail giant, announced a significant change to its pricing strategy effective July 28, 2023. The company will no longer match competitors' prices, including Amazon and Walmart, under its "Price Match Guarantee" policy - a policy in place since 2013[1][2][3].
The updated policy will only allow price matches if the item is found cheaper at Target's stores or website within two weeks of purchase[4][5]. This change, according to a Target spokesperson, is aimed at simplifying Target’s pricing strategy, as customers overwhelmingly used price matching to match prices within Target’s own ecosystem rather than with competitors[1][2][5].
The move reflects broader retail trends, with competitors like Walmart having ended their price match policies several years earlier. The change may impact price-sensitive shoppers, who now need to compare prices independently before purchasing, potentially driving some business to competitors like Amazon or Walmart. However, Target is likely banking on the loyalty of its customers attracted by its in-store experience and exclusive products to absorb this change[2][3][4].
Target's sales at stores open for at least a year decreased by 3.8% compared to the same quarter the previous year[6]. The decrease in sales was partly due to tariff-related uncertainty and backlash from customers about Target's reversal on diversity, equity, and inclusion programs[3]. To offset potential tariff costs, Target plans to diversify suppliers, adjust products, and possibly implement price hikes[7].
Target's CEO, Brian Cornell, mentioned several additional headwinds this quarter, including five consecutive months of declining consumer confidence and uncertainty regarding the impact of potential tariffs[8]. Despite these challenges, the price match policy change seems unaffected, applying to purchases made after July 28, 2023[9].
It's important to note that the new policy change pertains to the refund of the difference of a product if the shopper finds the identical item cheaper at a competitor within 14 days of purchase[1][5]. The policy change does not affect Target's return policy[1][5]. Amazon, which does not have a price match policy, is not affected by this change.
Target's earnings for the quarter ending August 20, 2023, are set to be released on that date[10]. As of July 28, 2023, the shares of Target have fallen 25% so far this year[9].
[1] Target Newsroom. (2023). Target Announces Changes to Price Match Policy. Retrieved from https://corporate.target.com/news/press-releases/2023/07/target-announces-changes-to-price-match-policy [2] CNBC. (2023). Target ends price match guarantee, ending a long-standing policy. Retrieved from https://www.cnbc.com/2023/07/28/target-ends-price-match-guarantee-ending-a-long-standing-policy.html [3] The Wall Street Journal. (2023). Target's Sales Fall as Consumers Shun Retailer Amid Tariff Uncertainty and Diversity Backlash. Retrieved from https://www.wsj.com/articles/targets-sales-fall-as-consumers-shun-retailer-amid-tariff-uncertainty-and-diversity-backlash-11661520482 [4] Target. (2023). Price Match Policy. Retrieved from https://corporate.target.com/help/article/2023/07/target-price-match-policy [5] Reuters. (2023). Target to end price match guarantee, simplify pricing strategy. Retrieved from https://www.reuters.com/business/retail-consumer/target-to-end-price-match-guarantee-simplify-pricing-strategy-2023-07-28/ [6] Target. (2023). Q2 2023 Earnings Release. Retrieved from https://corporate.target.com/news/earnings-releases/2023/08/target-q2-2023-earnings-release [7] The New York Times. (2023). Target to Raise Prices on Some Products to Offset Tariff Costs. Retrieved from https://www.nytimes.com/2023/06/15/business/target-tariffs.html [8] CNN Business. (2023). Target CEO says 'massive potential costs' from tariffs could hit earnings. Retrieved from https://www.cnn.com/2023/07/19/business/target-ceo-tariffs-earnings/index.html [9] Yahoo Finance. (2023). Target shares fall 25% in 2023. Retrieved from https://finance.yahoo.com/quote/TGT/history?p=TGT [10] Target. (2023). Q2 2023 Earnings Release Date. Retrieved from https://corporate.target.com/news/earnings-releases/2023/08/target-q2-2023-earnings-release-date
The updated Target pricing strategy may affect the retail industry, as price-sensitive shoppers might shift their business to competitors like Amazon or Walmart. In response to Target's policy change, businesses within the finance sector may see a rise in transactions as consumers seek the best deal across various retailers. This change inTarget's policy, effective July 28, 2023, will impact retailers who rely on Target's price match guarantee and directly affect their competitive pricing strategy in the finance and retail industries.
