Best Buy: No more 'showrooming'

The retailer plans to end a customer's ability to window shop at its stores and buy elsewhere later, although it's not yet clear how.

By Benzinga Jun 22, 2012 5:06PM
By Louis Bedigian, Benzinga Staff Writer

Best Buy (BBY) has vowed to eliminate showrooming in its stores, hoping to curtail a practice that threatens to destroy big-box retailers.


The company, which operates more than 1,000 retail locations in the United States, has been hit hard with declining sales, poor management and a questionable credit rating. Best Buy attributes some of its losses to a concept known as "showrooming," in which consumers visit a store to examine a product but then buy it online. 


According to The New York Times, Best Buy is not the only company suffering from this practice. Target (TGT) reportedly removed the Kindle from its stores after discovering that consumers who saw the device in person still chose to buy it from Amazon (AMZN).


Best Buy shares have fallen more than 20% in three months, dropping from a year-to-date high of $27.51 on March 23 to $19.48 on June 21.


Now, the electronics retailer is planning to turn things around, in part by ending the practice of showrooming. According to Reuters, interim CEO Mike Mikan referred to this goal as a top priority for Best Buy. Another one of Mikan's goals is to provide additional training to Best Buy employees in an effort to improve customer service.


While the latter effort seems like a decent goal in competing against online retailers (some shoppers prefer the in-person customer service experience), it is unknown how Best Buy might prevent customers from showrooming.


One possibility: lasers. The Minneapolis St. Paul Business Journal reports that anti-showrooming lasers could be employed to "thwart" handheld scanners -- most notably those attached to shoppers' smartphones. While this might sound like a promising idea, it is unlikely to keep online shoppers from using Best Buy to their advantage. They could still walk into the store, examine a product, leave the store, and purchase it elsewhere.


In truth, that is what shoppers have always done. The only difference now is that there is a whole other retail landscape -- the Internet -- that makes this practice more enticing than ever before.


Some have already begun to speculate that Best Buy's employee training program may include showrooming prevention. How that would work, no one knows. But it could mean that employees will be trained to carefully watch and approach shoppers who appear to be showrooming.


This may be the only way to cut down on showrooming. But it could also annoy and scare off legitimate shoppers who wish to examine a product before making a purchase.


More from Benzinga
26Comments
Jun 22, 2012 7:39PM
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Match the price. You'll get the business. This ain't rocket science.
Jun 22, 2012 9:53PM
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Totally Agree with Usual Suspects.  If the price was the same, I would buy it then & there.  It's called impulse buying, and its still very useful in marketing.
Jun 22, 2012 10:02PM
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Smartphone screen protector @ BB, $20...Really??  Online $4.  Unless BB gets their prices in line, they are only a showroom & cannot prevent it, especially with their ripoff prices.  WE are NOT stupid!!
Stop treating your want-to-be consumers that way!
Jun 23, 2012 1:44PM
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   Sales tax is not a deal breaker for me. Selling something at full MSRP when others don't is. Hello (and goodbye) Best "Buy". I do most of my larger purchases at Microcenter. I use NEW EGG as my price guide. If Microcenter is within 5 percent, I buy there because NEWEGG's return policy just plain s u c k s . Most of the time they match them, unless the price is under their cost. At that point they tell me what I can buy it for.

   If a Best Buy employee approaches me because they think my activities are offensive to them, get ready for some shouting. Don't get me started on best blunder's Geek Squad scam they have running. if you have a computer problem, you're better off calling a relative with basic knowledge, than using those idiots.It should be a crime to charge clueless customers outrageous prices to "fix" the simplest of tasks. Look on the "bright side", you can get a tech to your house to video record your kids in the shower, which has already happened. I wouldn't be surprised if BB didn't try to charge them for the "service". 
Jun 23, 2012 1:30AM
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I use my smart phone at Best Buy to read the ratings and specs since Best Buy is utterly clueless about what consumers need when buying a piece of equipment. I need more specs than -  HD, 1080P and it's sales price. 

Best Buy needs to add real specs on the sales brochure, make the font bigger as I need glasses to read the stupid thing, and then actually hire a person who knows more than what the resolution is or how many gigs of memeory it has.

I also never buy anything now without checking the ratings on Amazon for the product. So maybe Amazon should accuse Best Buy shoppers of Online showrooming on their site. I do it every day.

A note to Best Buy - I can absoutely guarantee that I would leave and never step foot in a best buy ever again if a salesperson comes up and tells me to shut off my phone.

Jun 22, 2012 10:10PM
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How about consumer reviews? Would not think that a person with a smart phone would scan to read what the world is saying about a product, If it a good product that would alone intice them to buy.

and also messing with a walkin customer once would be the last time you see them.

So Best Buy, don't mess up and make things worse like so many other companys we have read about this year.

Jun 24, 2012 3:05PM
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Best Buy Created this "SHOWROOMER". They created Geek Squad who were a bunch of thieves and robbed me blind with poor work on my computer. I had vowed 10 years ago to never buy anything from them again, but I will certainly use them to research my next purchases. Their 200.00 harddrive that they would not warrenty has cost them to date about $35.0000 in sales from me let alone all the "SHOWROOMERS" I have taught. I do not want them to go out of business, but they need to rethink consumer complaint's and how they manage their stores. If they expect loyalty from me, I in turn expect loyalty from them.

Jun 23, 2012 12:37PM
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BB won't have their floor people try to figure out if a visitor is "showrooming" or just trying to get on-line info about the product.  That would be way too clumsy and lead to discrimination law suits.

The real only way to reduce "showrooming" would be for BB to try and convert those who are showrooming into buyers.  One of the best ways would be for BB  to have dirivative products/model #'s.  Items that can not be purchased on-line except from BB.com. BB needs to push their retail weight around with every supplier to give BB different product than the regular items [probably add one or more features over and above the regular product].  In this way, a "showrooming" visitor would need to engage a floor person to ask what the differences are, and the BB floor person has a chance to explain the product, the return policy, the free seminars to learn how to best use the product, etc.

All of this to perhaps convince the visitor that buying from the brick & mortar BB is the best option.

Jun 24, 2012 10:38AM
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People are looking for the best value, not necessarily the lowest price.

 

They use the bricks and mortar stores for the personal service and technical advise that’s not available online.  They will pay more for a product if they get the outstanding customer service and advise from technically knowledgeable staff that they’re looking for.  The problem is that Best Buy no longer provides that.

 

Since Circuit City closed Best Buy has virtually no competition, so they became complacent and is now on the same road to failure that Circuit City went down.

Jun 24, 2012 8:05PM
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Internet Purchase = cheaper and no taxes. It is that simple 
Jun 23, 2012 1:55PM
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Lasers? - Amazon apps allow for photos, typing in model #'s and products names. Amazon is kicking some serious rear ends!
Jun 25, 2012 7:00AM
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These guys are toast.  Walk into a BB these days and you can almost smell their impending demise.  Everybody has enough gadgets and are careful on expenditures, so the volume is not nearly what they need.  I'm not a shorter, but I'd sure consider shorting this one.  Their turnaround efforts will not work... what they need is a consumer spending turnaround.  You'd have to be crazy to go long on this stock
Jun 23, 2012 8:52AM
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The only thing that will accomplish is to keep people from going to that store at all.
The only reason I would ever set foot in Best Buy is to look at something I wanted to buy elsewhere.
The stores are just plain messy and noisy. When are people going to learn big box electronics stores don't work.

Jun 25, 2012 10:21AM
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Just beat Amazon's prices or carry exclusive items. Also posting user reviews would be nice.
Sep 1, 2012 1:33AM
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Its very easy to shop showrooming.  Just close up during lunch hour.  LOL!

 

If you have 1,000 door swings and only sell $185. in merchandise during the day, you're a show room.

Sep 1, 2012 1:28AM
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Pricewise they can't compete with online e-tailers.  Nobody can.

 

They might be able to compete with service and product reliability but right now, its just a place where people spend their lunch hour.

Jun 23, 2012 8:39PM
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To be clear, "razor thin" margins are the reason these stores are having problems....not "show rooming". BB would be better served teaching the assocoates who a "real customer" is. I see these "fine folks" all the time in the stores with their smart phone apps...but what are they really saving...pennies...AND these aren't REAL customers.. I have bought from BB and found their staff to be knowledgeable and helpful. I also understand to keep the lights on they need to make a profit. In addition, I have used Geek Squad on numerous occasions and have found the"the Geeks" to be honest...forthright and knowledgeable. The guy that set my wireless router up WITH security was great and my system has worked flawlessly. DF of mine to save a couple of dollars and avoid being "ripped off" went solo and bought his devices off the internet....STILL isn't right and I can "steal internet" from him in the street if I wished even when he can't get signal in his house...
Jun 23, 2012 8:28AM
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Until our government taxes online sales, brick and mortar stores will be at a disadvantage. If Best Buy has an item the same price that Amazon has it, your looking at a 7% increase here in FL. Amazon, like many online retailers, offers free shipping.

 

BTW, I do most of our shopping online so I'm not promoting the enforcement of sales tax even though I think it should be implemented.

 

 

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