story by Kim Souza
ksouza@thecitywire.com
Just six months after rolling out Savings Catcher and telling customers there is no reason to compare everyday low prices against Wal-Mart, the retail giant notified users of new restrictions as of Feb. 14.
Savings Catcher users were notified of the changes in an email on Feb.13, in which Wal-Mart thanked customers for using the savings tool but also noted a few changes to the program.
“Beginning Feb.14, we are removing some departments consisting mostly of items that do not have a like for like match at other retailers, such as produce and bakery items. Additionally, we are limiting our comparisons to offers of other mass market retailers, grocery and dollar stores, removing comparisons with drug stores,” the email stated.
Wal-Mart corporate spokeswoman Danit Marquardt told The City Wire that updates to Savings Catcher focus on grocery and consumable items that make up significant portions of customers’ weekly shopping stock up trips. She said Savings Catcher matches will continue to cover pantry staples, dairy products (like yogurt), cleaning supplies, health and beauty aids and over-the-counter medications.
Produce and bakery items as well as weighed meat do not have consistent uniform product codes (UPC) between retailers, which is why Wal-Mart said it will no longer match against competitor prices. Wal-Mart also said it opted not to continue matching against drug store competitors like Walgreen and CVS because that is not the channel most used for weekly stock up grocery shopping.
EARLY SUCCESS
Wal-Mart first unveiled Savings Catcher in March 2014, testing in a few markets before rolling it out it August and expanding it to include some toys during the holiday season. The retailer said in September it had returned $2 million to shoppers who were using the savings app. Wal-Mart declined to say how it planned to report these savings at year-end. The retailer does not allow shoppers to carry savings from year-to-year, noting that gift cards would be sent to those at year-end for the savings catcher balances.
A $599 annual limit was imposed on the Savings Catcher program per customer, according to the new guidelines found on the retailer’s website.
Analysts like Carol Speickerman, CEO of newmarketbuilders, have praised Wal-Mart’s Savings Catcher noting that it “adds a new dimension to its price match guarantee while continuing to make it incumbent upon shoppers to take the initiative. Wal-Mart can satisfy shoppers who are truly price sensitive and message value and price transparency to everyone else without lowering prices across the board. It offers the best of both worlds.”
Analysts with Cleveland Research had this to say about Savings Catcher” “It’s basically the same thing as the Ad Match Guarantee but it takes the work out of the hands of the consumer.”
PERCEIVED IMPACT
Restricting the program is not likely to have a big impact among avid users, according to some retail experts. A recent study by IRI found that 41% of consumers routinely shop multiple retailers to ensure they get the lowest prices. Sue Viamari, a retail expert with IRI told The City Wire that shoppers who are price sensitive do not mind shopping multiple retailers where they perceive they are getting consistent values.
“This shift in behavior began during the economic downturn and consumers have stayed with it. This is no longer a one solution fits all world” Viamari said.
Deep discount retailers like Aldi win favor by those shoppers looking for lowest fresh produce and dairy prices. For instance, Avocados were featured recently by Aldi for 29 cents each. Wal-Mart’s featured price of 59 cents that same week was 100% more expensive than Aldi. With the latest changes Savings Catcher will not capture that difference. Experts and shoppers recently interviewed say people who shop Aldi do so because they know they can get the lowest price on whatever produce the smaller retail is offering that given day, even if it’s on sale elsewhere.
Viamari said consumers are creatures of habit adding that they adopted several shopping strategies out of necessity when the economy was weaker, but in doing so they found out who has the best prices and consistent quality on the things they want. She said convincing them otherwise is no easy task.
Walmart’s new U.S. CEO Greg Foran has vowed to fix the “fresh” problem at Wal-Mart noting that he’s troubled when he sees too many shoppers walking past the fresh produce department to purchase items in the center of the store.