Will Dick’s price match keep it on top of the sporting goods category?

Discussion
Source: dickssportinggoods.com
Jul 19, 2017
George Anderson

Amazon.com isn’t the only online rival that Dick’s plans to match with its new “best price guarantee,” but it is among the most important in the sporting goods chain’s efforts to maintain its lead in the category.

While Dick’s has offered price matching in stores before, this is the first time the retailer has extended the offer to its website. When a customer finds an item they want to purchase from Dick’s and are ready to check out, they call a number and provide a reference to a website or ad with the product information. The online purchase is then completed on the call.

A message on Dick’s site tells visitors that it “won’t be beat by a qualifying retailer’s price offered in their store or on their website.” In addition to matching competitor pricing, Dick’s adds that purchases qualify for points in its Scorecard rewards program. To qualify for a price match, items must be “identical,” which means they are the same brand, model number and color as sold by Dick’s. Other caveats are that Dick’s will not price match products marked down during Thanksgiving or Cyber Week as well as those promoted during special daily and hourly sales.

Dick’s has published a long list of retailers and suppliers it plans to price match:

Many other retailers have engaged in price matching in recent years with varying degrees of success. Academy Sports, among the chains Dick’s is price matching, unveiled its “Price Match + 5%” program during the holiday selling season last year. To be eligible, customers show a printed copy of a competitor’s ad or a digital version on their phone. The retailer offers a chat option and phone number for customers shopping online looking for a match.

DISCUSSION QUESTIONS: Where do you think Dick’s will see the most competitive pressure going forward – Amazon, other sporting goods chains, vendors selling directly to consumers, etc.? Will its “best price guarantee” help the chain maintain or grow its market share in the sporting goods category?

Braintrust
" Price matching certainly is a value-added proposition for Dick’s, however their strategic moves are far more critical for their long-term survival."
"I fear this is a slippery slope for Dick’s. Consumers may soon decide that price-matching after the fact is too much hassle..."
"Price is certainly a major factor in purchase decisions, but what these companies are competing against is friction in the buying process."

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14 Comments on "Will Dick’s price match keep it on top of the sporting goods category?"

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Mark Ryski
BrainTrust

I believe Dick’s primary competitive pressure will come from Amazon. Price matching will help reduce purchase friction and extending it to online purchases can’t hurt. However any price-match program that is onerous for customers won’t have much impact. Furthermore, consumers have become desensitized to claims like “best price guarantee” so this type of positioning in my opinion will have very little impact on helping Dick’s grow its market share.

Max Goldberg
BrainTrust

Nice gimmick. Dick’s price match is a good idea, but how many online shoppers are going to place a call, endure hold times, wait for the Dick’s employee to verify the match and then complete the order? It’s too much time. Too many steps. Dick’s will fare better with consumers that come into their stores, find an item they want to purchase, show the online price at the register and immediately receive the discount — just like they do at Best Buy.

Manish Chowdhary
BrainTrust

Dick’s will continue to feel the competitive pressure from Amazon and other online retailers. It is great that they are offering the “best price guarantee” and many people will take advantage of that offering. There are some consumers that will go all out to get the lowest price on an item and take the extra time to call in, speak to a rep and finish the checkout over the phone. Then there are the other consumers that would rather checkout quickly and save their time (which is also money).

Dick’s price match will likely maintain its market share — it won’t hurt them.

Brandon Rael
BrainTrust

Price matching certainly is a value-added proposition for Dick’s Sporting Goods, however their strategic move towards curated assortments and solidifying their partnerships with Nike, Adidas and Under Armour are far more critical for their long term survival and relevance.

Outstanding service along with competitive pricing will keep the customers coming back from more. The key differentiator for Dick’s is their sales floor specialists who are evangelists for not only the product but a store experience that is centered around healthy living and a sporting lifestyle. Their transformation is in full motion, and it will be intriguing to see how competitive Dick’s remains as the industry has been significantly impacted by Amazon’s reach.

Robert DiPietro
BrainTrust

Amazon is the competition for Dick’s and everyone in retail. The nuance of the exact match will help reduce matches as larger retailers can have specific SKUs/colors, etc. that do not fulfill the requirements. I think the price match is a nice feel-good initiative for customers but it has to be frictionless. If they make it easier for the consumer it might maintain share but will compress margins.

Art Suriano
BrainTrust

Though I see some benefit in this, I am concerned that when all the focus is on the price, retailers may be doing themselves more harm than good. Price is important and today consumers can easily find the lowest cost for an item researching online. But if retailers are interested in building brand loyalty, price alone is not the answer. Incentives, service and other benefits do that. Brick-and-mortar chains have greater costs than e-commerce companies because of store expenses — rent, employees, etc. When you get into a price war, I fear that Amazon and other e-commerce companies will have the advantage. I say it all the time; a successful business is one that doesn’t chase the competition but leads the way and has the competition chasing them. Dick’s and all retailers need to focus more on the reasons customers should shop them and not their competitors. That starts with being creative and most importantly being different.

Shep Hyken
BrainTrust

I always worry that a retailer’s low-price strategy is the only thing that keeps the customer “loyal.” If another retailer has a lower price, the customer moves. In other words, the loyalty is to the price, not the retailer.

Dick’s needs to be competitive with Amazon. Price matching does give a customer confidence. Add to that good selection, convenience (online, shipping, easy returns, etc.) and expertise, and you have a winning combination. Dick’s is focused on one sector. That’s their expertise. They have the variety of selection and they are price matching. Those are the table stakes needed to compete with Amazon.

Stefan Weitz
BrainTrust

Price is certainly a major factor in purchase decisions, but what these companies are competing against is friction in the buying process. Amazon makes it so simple for me to give them my money and have a predictable experience — including when things go wrong — that price isn’t often my #1 purchase consideration. While it may factor more into other people’s process more heavily, the amount of time people may have to spend dealing with a fickle price match program could ultimately make this more a PR stunt than a major boost to earnings (which isn’t necessarily a bad thing). That all said, it would be great if more retailers tried aggressive programs such as this as long as they balance them with a relatively simple way to engage in the experience.

Sky Rota
Guest
1 month 2 days ago

Honestly, I love going to Dick’s to shop. I never purchased anything from them online. Their stores are fantastic and there is so much to see that you wind up going for one thing and buying two others. There is no brick-and-mortar competition for them. There really is no other sporting goods chain competition for them online either. I have searched.

It’s great to have the best price offer however it just sounds like a nightmare to do. No one is going to call and talk to anyone. I don’t see this new offer growing Dick’s market or changing it in any way. Plus if I’m going to buy something sports-related Dick’s gives me scorecard bonus points and checks in the mail. I have a $40 one sitting here right now. Last time I checked Amazon doesn’t give you anything. We just bought a new basketball court from Dick’s the other day. Best offer out there.

Kim Garretson
BrainTrust

I like the high-touch aspect of a phone conversation with a customer. Of course if too many requests are denied, watch out for social media blowback.

Cristian Grossmann
BrainTrust

Amazon will have a lot of pressure in the online and in-store space. I don’t think price matching will have much impact. If the customer finds an item they want, has to search other websites for a better deal, then call Dick’s with the exact price match, why would they go through all that time and effort if they could just buy the cheaper product from another source directly?

Kenneth Leung
BrainTrust

Price matching is a defensive move for maintenance to prevent lost sales, it doesn’t draw traffic to the store for browsing. Merchandising and omnichannel experience is going to be key for Dick’s or any retailers to compete effectively against Amazon.

Dave Wendland
BrainTrust

I fear this is a slippery slope for Dick’s. Consumers may soon decide that price-matching after the fact is too much hassle and that Dick’s must be priced too high. Although as a short-term tactic it can be useful, I personally do not believe such an approach is a long-term strategy.

Ricardo Belmar
BrainTrust

Price matching isn’t really an offensive move — it’s a defensive one when you’re in fear of eroding market share. On the e-commerce front, it’s unlikely shoppers are going to pause their purchase to make a phone call (online chat anyone?) to get a price match. That’s adding friction not reducing it in the checkout process. For in-store shoppers, this will be useful and I can see many shoppers taking advantage of it.

The real question is whether or not this builds brand loyalty or just trains customers to expect a lower price. Price alone doesn’t build loyalty. Even Amazon isn’t always the lowest price in many product categories — but that doesn’t stop consumers from shopping there. Why? Because the overall experience is easier and better from the customer’s point of view. Dick’s would do well to work on enhancing their overall shopping experience both online and in store to compete rather than just rely on price.

wpDiscuz
Braintrust
" Price matching certainly is a value-added proposition for Dick’s, however their strategic moves are far more critical for their long-term survival."
"I fear this is a slippery slope for Dick’s. Consumers may soon decide that price-matching after the fact is too much hassle..."
"Price is certainly a major factor in purchase decisions, but what these companies are competing against is friction in the buying process."

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