Best Buy declares war on showrooming

Next month, the big-box retailer will start matching competitors' prices, including those of Amazon, which is the trend's biggest beneficiary.

By Aimee Picchi Feb 18, 2013 1:37PM

 Credit: © BRENDAN MCDERMID/Newscom/RTR
People walk past a Best Buy store in New York in August 2012For brick-and-mortar retailers, showrooming is an existential threat. It saps their life away when customers visit a physical store to look at products such as smartphones, but then buy online to get a better deal. 


But now, Best Buy (BBY) says it has a solution to the problem: It's enacting a permanent policy to match the price offered by all local retailers and 19 online competitors. “They don’t want to lose more market share to online retailers,” University of Michigan business and law professor Erik Gordon told Bloomberg. The policy will go into effect on March 3 and includes price-matching against Amazon.com (AMZN), the biggest beneficiary of showrooming.


Best Buy has little choice. It's the top victim of the behavior, according to a December poll from market research firm Harris Interactive. 


Among the consumers who said they showroom, Best Buy was their biggest resource, with 24% saying they stop at the big-box tech retailer to check out its merchandise before buying elsewhere. Wal-Mart (WMT) was the No. 2 resource, with 22% of showrooming consumers checking out products at its stores that purchase online.


The big winner is Amazon, with more than half of showrooming customers opting to buy from the online retailer after visiting a bricks-and-mortar store, the study found. 


Best Buy's new price guarantee has a few catches, however: A customer has to ask the retailer to match a price. It's also limited to one match per identical item, and it doesn't include contract mobile-phone devices and plans.


The new policy follows Best Buy's temporary price-matching policy over the holidays. That helped the retailer exceed analysts' expectations when it reported holiday sales that were unchanged from a year ago, Bloomberg notes. 


Nevertheless, the new policy could deliver a new set of challenges, especially if it proves popular with consumers. That's because lower retail prices could eat into Best Buy's margins, forcing the company to cut costs and protect profits.


More on moneyNOW


322Comments
Feb 18, 2013 4:10PM
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I still wont buy at Best Buy.  Their service sucks.  Their sales "associates" are rude and condescending.  Amazon will deliver items to my door and there is no sales tax.  Why in the world would any one buy from BB?
Feb 18, 2013 4:07PM
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EVIDENTLY, you have not shopped SHOPKO Nor Wally World alately then! BINGO-BAM-BOOM = ZERO !
Feb 18, 2013 4:06PM
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It is easier to return stuff to Amazon than Best Buy
Feb 18, 2013 4:06PM
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That just mark's the end for Best Buy...may BEST BUY  R.I.P...! A desperate move that will close stores faster and start a price war. A game of attrition that Best BUY can not win...!
Feb 18, 2013 4:06PM
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That'll be a nightmare. I work in retail management. The most reliable way to meet that promise is for Bestbuy.com to lower prices, and have the stores meet or beat its own website prices, so the staff won't screw thing up by accepting bs quotes from some fake china website.
Feb 18, 2013 4:04PM
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*shopping at Best Buy*

BB: would you like to sign up for DirectTV?
Me: No.
BB: would you like a subscription for Entertainment Weekly?
Me: No.
BB: would you like to join our rewards program?
Me: No. I just wanted help finding a computer monitor
BB: someone else needs  to help you with that.
Me: wait. What? aren't YOU helping me?
BB: No, I work for DirectTV.
Me: Can I get someone from Best Buy to help me then? I'd grab the monitor I want and take it up to the counter if I could, but its locked behind this grate.
BB (Well, directTV man): That's not my job.
Feb 18, 2013 4:04PM
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Matching Amazon.com wouldn't have been necessary if they hadn't alienating their entire customer base with their BS rewards program.  In $1500 spent I managed to get back $5 in rewards. I would have shopped there regularly just so I could take a look firsthand what I was buying. When a useable 5% was included, it wasn't that bad. Now they are the last resort for shopping. For $5, I will look for rewards and take my loyalty elsewhere.

Feb 18, 2013 4:00PM
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Best Buy is not really serious about price matching or being the bets retailer. They are gambling that most won't bother to look up the comparison prices. If Best Buy was serious they would check their prices every morning, and price their products to compete instead of waiting for the customer to catch them at it.

 

Best Buy is not long for this world doing the business the way they do.

Feb 18, 2013 3:57PM
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Theres still a hook, and people will still snear and wrinkle there nose as i do........(A customer has to ask the retailer to match a price. It's also limited to one match per identical item, and it doesn't include contract mobile-phone devices and plans.) .......In other word they intend to keep there prices just were they are at the shelves and leave it to you to do the work to figure it out to coupon, or ask for  better prices rather than changing them where they can be seen at eye level. And this is BS as because this means that the sales then are limited to those reading this article and who happen to know about it, and in turn isnt really a sale at all and changes nothing and puts them back were they already are. There really hoping some one will go ahead and pay the tripple high retail and not ask for the comparable sale price. They will probably end up - belly up after all.
Feb 18, 2013 3:56PM
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Best Buy is a full retail price seller, so why would anyone buy for them if it isn't a sale item.  
Feb 18, 2013 3:54PM
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I don't mind pay sales tax as long as I can return the item if I don't want it. It worth the 5% tax to not have to deal with a return online for me. I have never been hassled at Best Buy about a return, but Amazon can be a pain from what I seen and heard.

If customer service bothers some of you that much at Best Buy you should try Wal Mart or Kmart and see how you like their customer service.

As far a s Amazon I buy there as well, but mostly I purchase the accessories I can't find elsewhere in local stores. You shoppers who think you are saving money are costing Americans jobs just like before when people were yelling buy American Made and you thought you were saving money then,

Feb 18, 2013 3:54PM
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It’s a curious dilemma. I can understand people wanting to get the best price. On the other hand, I would never pay $2000+ for flat screen TV, computer, or anything online sight unseen. I want to touch, feel, and see it for real before I lay out that kind of money.

 

I think Best Buy should lean on the manufacturers rather than their customers to recover the cost of show-rooming. I’m sure the manufacturers can appreciate that if nobody did it, customers won’t buy anything unless their friend already has one.

  

Feb 18, 2013 3:53PM
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I don't buy items, especially major ones online. I have gone to best buy and they bent over back wards to match a military discount on an led tv purchase. I was pleased and the TV works great. I don't buy extended warranties because I research before I buy. One outlet chain that has a good warranty policy is Costco, where they double your electronic warranty free.
Feb 18, 2013 3:51PM
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I do more "showrooming" on the internet, visiting different retailers to find the best bargain and then going into the store to buy.  I also use the internet to read reviews of products from real-life users before buying, again, in a real store. 

Call me old fashioned, but I like the immediate gratification of buying something and having it immediately in-hand to enjoy.  I've purchased from BB for that very reason. My computer... upgraded keyboard, cell phone, a microwave, a camera, and a stereo.  I purchased these items at BB because they were good products at good prices.  I've also purchased BB-type items from Target, WalMart, and Sears.  I can't say that their salespeople are any better or worse than at all the other stores.  I don't get people who gripe about the quality of the sales staff but then buy off the internet where there is no sales staff. 

Maybe BB's model has seen it's time and it needs to do something else.  This is a great start.  Maybe look at your departments and weed out the less than stellar ones.  I see people browsing the music/video/software section, but I rarely see anyone buying.  The audio section also seems to get little action.  Why not focus on TVs and such, cameras, appliances, and phones.  And kill the small appliances... I can always find the same or better pricing at any other store.  Focus, BB, focus. 

And train your staff on the floor to be experts in 2-3 areas rather than so-so in one.  Develop some online training modules and ensure that your staff has ample time to train, say, 30 minutes of each shift until a solid base of knowledge is acquired.  Employees with real knowledge who are able to advise buyers, along with your new pricing model, with knock that pants off of internet stores.
Feb 18, 2013 3:49PM
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Let Best Buy go away and then let those shoppers worry about where to demo a new product.  I don't mind paying a little extra for the benefit of touch and feel before I purchase.  Profit is not a dirty word and those that disagree, I can only hope that they realize this when their jobs are eliminated or outsourced so that their company can stay "competative".
Feb 18, 2013 3:47PM
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just bought a new tuner and a set of speakers over the weekend. Although i was unawareof their new policy the gentelman that was helping me flat out said "and remember you asked me to check amazon for a price difference"  He never had to bring it up but did so on his own, saved me a hundred buck.

 

Feb 18, 2013 3:44PM
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Oh, yes, I forgot to mention that I recently had an issue with my laptop, which I bought three years ago from Best Buy. I took it in to the Geek Squad, fully expecting to pay a hefty repair price. The cost: Zero. That's right, it cost me nothing because we were able to clear up the problem in a short time. Good customer service is the best PR in the world. Can Amazon do that?
Feb 18, 2013 3:41PM
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Propaganda604 is dead on - This is not to mention the rude and knowledge lacking sales people they have and their arrogant mgr's.  I stopped buying from them about 4 years ago.  Don't even miss them :)
Feb 18, 2013 3:39PM
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What will Amazon do if the brick and mortar stores like Best Buy, Barnes and Noble, etc. go out of business? Where will these "showroomers" go to see the products they're thinking of buying? Frankly, I rarely buy anything sight unseen. Seems to me it would be a pain in the neck to buy from Amazon and, if I'm unhappy with the product, have to return it, repackaging it and making a trip to the post office. Give me a store I can deal with personally. If there's a problem with a laptop I buy from Best Buy, I'll go back to the nearby store and deal with it there. If there's a book I want to read, I want to take it home now and curl up with it now because I'm excited about reading it now, not a couple days later. Modern technology is great, as far as it goes, but our dependence on it and its fallout have cheapened our way of life. Another step toward mediocrity.
Feb 18, 2013 3:37PM
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You go to best buy and then amazon figure it out. amazon has much more of everything at lower prices & free shipping.

 

Not everyone wants to purchase what others have including home stereo equipment.

 

Doe's everyone want digital this and that?

 

What about a just a duel channel Kenwood?  

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