David Jones promises to match some online prices, but does the move take it downmarket?

Bricks and mortar shops have complained bitterly the last couple of years that people are using their stores to try on clothes, and then walking out to buy the same products online.

But David Jones is attempting to flip that around: the upmarket department store says it will match the online prices of its competitors for products it sells in store.

DJs says the promise – an extension of its existing policy of matching prices on identical items to those offered by other bricks-and-mortar retailers – will work in its favour by bringing more people in to stores. The promise is likely to heighten competition between DJs and other major retailers such as Myer, Dick Smith and JB Hi-Fi.

But there’s a caveat: DJs will not match prices offered by overseas retailers or by online-only retailers, according to the Australian Financial Review.

CEO Paul Zahra told the paper the policy is designed to “reaffirm to the Australian consumer that we are price competitive and to come and shop with us. We have a competitive pricing policy today, so we understand quite a bit about how consumers shop and how the policy is used”.

But Brian Walker, of the Retail Doctor, warns David Jones risks damaging its long-held position as Australia’s pre-eminent mid to luxury department store.

“All the press we hear now about DJs is discounting and price matching, but they’d be better off working on its database, creating more events, driving that premium offer,” Walker says.

“And it’s not the sales they make – it’s the profitable margin they make on the sales and the repeat customer.”

Walker warns that once DJs shifts its focus from being an “elegant, refined, sophisticated retailer” to targeting the price-driven consumer, it will be hard to backtrack once consumer spending returns with a vengeance.

“If they’re trying to win all customers, they can’t be all things to all people,” Walker says.

“Building that customer relationship, and uniqueness, I think is a better strategy,” he says.

“And as far as old customers leaving them, customer service is the most consistent criticism of department stores – wouldn’t they be better to invest in that?”

He adds that if a company is going to price match, it should do so in a “covert way”.

David Jones was contacted for comment this morning but did not respond before deadline. Myer was also contacted to see whether it had similar plans but was also unavailable.