December 15, 2013
More Retailers See Haggling as a Price of Doing Business
By HILARY STOUT
Pay no attention to the price on that tag.
Or even the markdown.
This year some shoppers are quietly taking the art of bargaining up the escalator to the floors selling cashmere or over-the-knee leather boots, building on the haggling skills they acquired in the last few years getting big-box store deals on TVs and the like.
Armed with increasingly sophisticated price-tracking tools on their smartphones and other devices, consumers have become bolder, and they know that they often have the upper hand during a tough season for retailers. Recognizing the new reality, some retailers, desperate for sales and customer loyalty, have begun training their employees in the art of bargaining with customers.
Last month, Best Buy essentially invited consumers to bargain when it announced that it would match the prices of any competitor this holiday season if customers showed proof of the lower price.
But other retailers are doing the same with less fanfare, or even making steeper concessions. DealScience, a new website that collects, compares and ranks online deals from thousands of retail brands, discovered that at least 20 percent of big-box retailers had price-matching policies, though many do not advertise them.
The site’s co-founders, Brandon Hunt and Cory O’Daniel, said that they had been surprised to find that at least a half-dozen merchants — including some of the original haggling stages like Best Buy, Home Depot and Lowe’s — now let managers go a step better and offer 10 percent below a competitor’s price.
The bargaining practices are more commonplace for home and sporting goods or electronics, but even higher-end retailers like Nordstrom have price-matching guidelines — though they usually do not broadcast the terms.
Joe Marrapodi, one of the founders and the chief executive of Greentoe.com, a new name-your-own price website, walked into Nordstrom and Bloomingdale’s the other day in Santa Monica, Calif., and without identifying himself or his occupation, casually asked employees if they were open to bargaining. Both the sales representatives and the managers said yes without hesitation, he said, and cited specific price-matching policies.
“I think they kind of keep it low key,” he said. “They don’t want it to be a thing.”
A spokeswoman for Nordstrom said in a statement, “For as long as we’ve been in business we’ve been committed to offering our customers the best possible prices, including meeting competitor pricing on similar items.”
There was recognition among guests at a private round-table dinner with retail executives in Dallas that their stores had better accept regular give-and-take with customers, according to Alison Kenny Paul, vice chairwoman and leader of United States retail and distribution at Deloitte. “Some talked about their epiphanies and said the world has changed, we really have to do this,” she said.
As a result, Ms. Paul said, some retailers are training employees on the rules of bargaining. Instead of price discounts, those deals may be add-ons, like an extended warranty, free delivery or free installation.
While it is mainly department or floor managers who are given the authority to make deals, other employees are now being coached to “recognize when a consumer needs to negotiate,” and to “spot the consumer” getting ready to walk out the door, she said.
When a sales clerk at Kohl’s in Kennewick, Wash., recently asked Siobhan Shaw, who was buying an armload of items from the sale rack, if she would like to open a store credit card, Ms. Shaw recalled that she replied firmly: “No.”
“But,” she said she quickly asked, “can I get the same discount she got?” She was referring to the woman ahead of her in line, who had asked for a discount and received 15 percent off. The answer was yes.
Retailers panicked a few years ago when they realized that some consumers were using brick-and-mortar stores to view products, only to walk out and order them at a lower price online. Now, Ms. Paul said, they are trying to “turn lemons into lemonade” by using that model as an opportunity to work with customers and even cement their loyalty.
Marilyn Santiesteban of Newton, Mass., rarely makes a purchase without first asking a manager for a better deal, and as a result, she has won significant discounts on things as diverse as a dishwasher at Sears and boots for her daughter at Macy’s. The other day, she said, she went shopping at a Barnes & Noble outside Boston for a book-with-toy set for her 7-year-old nephew. Her smartphone told her the item was about $6 less at Amazon. She pointed this out politely to the store manager, and he instantly matched the price.
“You think I’m not going to buy everything from Barnes & Noble now?” she said.
Bargaining “is not adversarial,” she said, explaining that she considers it a service to tell a store she can get a better price elsewhere. “We would both like it if I would walk out of this store having purchased an item.”
Mr. Marrapodi’s company, Greentoe.com, which has Silicon Valley venture capital money behind it, opened this year. It lets consumers submit offers on merchandise listed in five categories, including cameras, baby equipment, household appliances and home theater. The company’s software determines whether the offer is reasonable and sends it to a network of retailers that encompasses both big-box stores and small dealers. (All are vendors that are authorized by the brands.) If the merchant accepts the offer, it makes the transaction directly with the consumer.
James Myers of Walton, Ky., went to Greentoe.com to make an offer on a Panasonic 60-inch plasma TV with voice control that was priced at over $2,000 at many retailers. He offered $1,539. After a little haggling, he was able to buy it from one of Greentoe’s retail partners for $1,749 (shipping included).
“I truly feel that the shopping landscape is going to change,” Mr. Marrapodi said. “It’s going to be much more driven by the consumer and ability to negotiate.”
In the coming year, Greentoe, which has more than 50 retail partners and 50,000 registered users, plans to add categories, including possibly exercise equipment, handbags and luggage.
Its ultimate aim is to make a negotiating app, Mr. Marrapodi said, so “you can do all this before you leave the store.”
There are several unwritten rules about negotiating with a retailer.
It has to be “consumer-initiated,” said Virginia Morris, vice president for consumer strategy and insights at Daymon Worldwide, a consulting firm. She said the customer must ask for a deal. Do not, she said, expect the retailer to offer it.
It has to be a reasonable offer, made politely — either a request to match a price or to offer a slim discount.
“The key is to be polite and confident,” said Kyle James of Redding, Calif., who writes a blog about personal finance and frugal living.
Mr. James has even found a way to bargain with e-commerce sites: live chat rooms. He will type a request, as he did recently with a landsend.com employee: Do you have a free-shipping coupon or another discount?
“Nine times out of 10 they have coupons sitting at their desk to give to you,” he said.
“They know you have things sitting in your cart, and they do not want to lose you.”