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Has price matching died down?

By Jeff Frank

Price matching is no longer as common for most consumer related products in the U.S.

Nationally branded commodities, such as food and pharmacy items have been declining in popularity over the past decade. This is paralleled by the growth of house brands.

Among the many advantages of house brands is the difficulty of price matching by consumers armed with smart phones.

Over the past decade manufacturers and retailers have become very skilled at creating non-commodity fashion-related products with slight variations that can be marketed under different model names or numbers that are not easily compared.

Large retailers typically demand exclusivity for most of the products they purchase, specifically to reduce price matching.

In the furniture industry exclusive models that cannot be easily compared can be created by changing a finish or the shape of a piece of hardware or simply by changing a label.

At first the growth of internet sales made price comparisons far easier than they had been previously.

Eventually, however, retailers and manufacturers reacted by becoming far more flexible in creating multiple model names and numbers for virtually identical products.

I was a buyer for a major furniture retailer more than 30 years ago. When we purchased a new product from a manufacturer our standard line would be:

“We can’t tell you who you can sell to in our market, but we can tell you we will not buy any items that you choose to sell to our competitors.”

This mindset created some interesting situations.

Major furniture retailers would line up at the showrooms of their major suppliers as early as possible on the first day of Markets when new product lines were introduced.

The first major retailer in each region to commit to a new product line would effectively block its competition from offering those same products.

The growth of online furniture retailers changed this dynamic.

Regional retailers could no longer demand total exclusivity within their own territories when online websites could advertise similar products nationwide.

As a result, furniture manufacturers, with the cooperation of their retail partners, have become highly skilled at creating minor product variations with exclusive labels that cannot be easily compared or price matched.

The mattress industry is particularly good at this.

Major brands such as Serta, Sealy and Simmons have hundreds and hundreds of similar products with slightly different model names. This makes price matching among different mattress retailers almost impossible for most items.

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