price matching

Price Matching: 4 Benefits and 4 Disadvantages

Price matching is a popular retail strategy where stores match the prices of their competitors for the same product. In today’s competitive marketplace, retailers offer price matching to attract more customers and retain existing ones. While this strategy can offer benefits to both customers and retailers, it also comes with some disadvantages. In this blog post, we explore the advantages and disadvantages of price matching.

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Benefits of Price Matching

Increased Customer Satisfaction

Price matching can increase customer satisfaction by offering them the lowest possible price. Customers are more likely to purchase from a store that offers price matching than from a store that does not. This is due to the simplicity and accessibility of being able to compare prices online. Selling at the lowest possible price can also lead to increased loyalty and repeat business from satisfied customers.

Competitive Advantage

Matching can give retailers a competitive advantage in the market. By matching the prices of their competitors, retailers can attract more customers and increase their market share. This can also help retailers to stand out in a crowded marketplace and differentiate themselves from their competitors. Indeed, being able to monitor competitor’s prices and matching below their price is a great booster to attract more customers from online platforms.

Improved Sales Performance

Price matching can lead to improved sales performance by increasing foot traffic to the store. When customers know that a store matches their prices, they are more likely to visit that store and make a purchase. This can result in higher sales volumes and increased revenue for the retailer.

Reduced Inventory

Price matching can also help retailers to reduce their inventory levels. When retailers match the prices of their competitors, they are more likely to sell their products faster. This can help retailers to clear out their inventory and make room for new products. If you are looking to get rid of a specific product, then you should really think about price matching it with competitors in order to sell it out faster.

Disadvantages of Price Matching

Unfortunately, it’s not all rainbows and butterflies when it comes to price matching. Sometimes, it doesn’t make sense for some businesses to use such a strategy. Let’s see the main cons of using matching below:

Reduced Profit Margins

Price matching can reduce profit margins for retailers. By matching the prices of their competitors, retailers may be forced to sell their products at a lower price than they originally intended. This can result in reduced profit margins and lower overall profits for the retailer. You have to ensure that this is the correct strategy for you, as sometimes selling a product a lot cheaper than what it should be does not make sense. 

Increased Competition

Price matching can also increase competition among retailers. When retailers match the prices of their competitors, it can lead to a price war where retailers continuously lower their prices to attract more customers. This can result in lower profits and reduced market share for retailers. You have to be careful to know your competitors well before beginning a price matching strategy. 

Complex Pricing Strategies

Matching can also make pricing strategies more complex for retailers. Retailers need to carefully monitor the prices of their competitors and adjust their prices accordingly. This can be a time-consuming process and can lead to errors if not done correctly. You have to ensure that the technology and software you are using to price match is working efficiently and offers reliable data.

Unintended Consequences

Price matching can also have unintended consequences. For example, retailers may match the prices of their competitors for a certain product, but this can also lead to customers expecting the same price for other products. This can result in reduced profits and increased costs for retailers.


Matching prices can offer both benefits and disadvantages for retailers. While it can increase customer satisfaction, provide a competitive advantage, and improve sales performance, it can also reduce profit margins, increase competition, and make pricing strategies more complex. Retailers need to carefully weigh the pros and cons of price matching and determine if it is the right strategy for their business. Ultimately, price matching can be a powerful tool for retailers to attract and retain customers, but it should be used strategically and with caution.


Most frequent questions and answers​
How do retailers effectively implement price matching strategies without significantly reducing their profit margins, considering the potential drawbacks mentioned in the article?

Retailers can effectively implement price matching strategies without significantly reducing their profit margins by carefully analyzing their cost structures and setting price matching policies that align with their overall pricing strategy. This may involve identifying products where price matching is feasible without sacrificing profitability and ensuring that price matching is only applied to select items or under specific conditions. Additionally, retailers can explore alternative approaches, such as offering price matching guarantees with limitations or incorporating value-added services to justify higher prices.

What are some specific tactics or best practices that retailers can employ to mitigate the risks associated with price matching, such as increased competition and unintended consequences?

To mitigate the risks associated with price matching, retailers can employ several tactics and best practices. Firstly, they can invest in robust pricing intelligence tools to monitor competitors’ prices accurately and adjust their pricing strategies accordingly. Secondly, retailers can establish clear price matching policies and communicate them transparently to customers to manage expectations and prevent unintended consequences. Moreover, retailers can differentiate themselves through other value propositions, such as superior customer service, product quality, or loyalty programs, to minimize the focus solely on price.

Are there any industry-specific nuances or considerations that retailers should take into account when deciding whether to adopt price matching as a competitive strategy, beyond the general advantages and disadvantages outlined in the article?

Retailers should consider various industry-specific nuances and considerations when deciding whether to adopt price matching as a competitive strategy. For instance, in industries with high price sensitivity and intense competition, such as electronics or consumer goods, price matching may be more prevalent and necessary to remain competitive. Conversely, in industries where brand image and exclusivity play a significant role, such as luxury retail or niche markets, price matching may not align with the brand’s positioning and could dilute perceived value. Additionally, retailers should evaluate their target customer demographics, market dynamics, and competitive landscape to determine the feasibility and potential impact of price matching within their specific industry context.

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