Best Buy launches risky price-matching plan
The struggling chain can't hide from its larger, nimbler rivals.
The company has seen same-store sales fall in eight out of the past 10 quarters, a trend that is not sustainable. Many consumers, including this one, go to Best Buy to check out gadgets and gizmos that they will buy from a rival website at a much lower price. The practice has been dubbed -- grammarians, avert your eyes -- "showrooming." This happens at other chains, such as Wal-Mart (WMT), though it's more of an issue in sales of bigger-ticket items.
Founder Richard Schulze wants to take the chain private, and it's unclear whether he is keen on the price-matching idea. Crafting a price-matching policy will be tricky because it will cost Best Buy lots of money. Some goods will be excluded, though it's unclear which ones. Moreover, it could backfire easily.
Fewer consumers may go to Best Buy if they know its prices are no better than what they can get online. The bigger problem, however, is that Amazon can easily lower prices even further because it does not have the overhead of large numbers of stores. Best Buy will have difficulty maintaining its profit margins.
Investors are demanding a better performance from the company, given that its shares have slumped nearly 25% this year. Consumers are feeling better about their financial futures as the real-estate market rebounds and unemployment drops. The question is whether they will spend their hard-earned cash at Best Buy.
Jonathan Berr is long Wal-Mart. Follow him on Twitter@jdberr.
When Best Buy first opened back in 83 I was an overjoyed buyer. Lower prices, great customer service, well stocked and clean. They are presently non of those things. After their hand in the demiss of Circuit City and other local retailers in my area, they have lost their position as a premier electronics retailer. They are expensive and just don't have that customer service touch.
I don't feel sorry if they go out of business.
I've purchased a few items at Best Buy. I don't why people are having a problem with service there cause their service is much better than Wal Mart, Target, or Kmart. Returns are easy now as well and quite easily done at Best Buy. Ever try to return an item at Wal Mart like a computer, TV, or other electronics? It can be a nightmare to return these items at Wal Mart.
The problems I have at Best Buy are:
1. They quite often don't have the item in stock I want when it's on sale.
2. Some thing are overpriced like cables and other items that should be included or at least cheaper when I buy a DVD player or a camera.
3.They don't have a lot of the accessories that go with a purchase. e.g. Camera lens, lens filters, and a assortment of choices.
Amazon beats Best Buy hands down on choices for accessories on many items. I just purchased a Sony Alpha camera from Best Buy at a good price lower than Amazon, but I bought almost all my camera accessories online from Amazon simply becuase Best Buy didn't have them.
This is great news. I saw this coming last week though. Went in to get the new Avengers Bluray which I had preordered. I had just checked on Amazon to see how much they were selling it for and saw the extended 5 disc set for $19.99. I went into bestbuy and asked at the counter if they would price match. Sure enough, there was zero problem. Was told then that they will price match anything Amazon sells. So not only did I get the price match and the metal storage case that bestbuy gave for preorders but I got to walk out, pop it into my bluray player and watch the movie that evening without waiting 3-5 days for Amazon to deliver it. Didnt have to worry about a broken case (as I've gotten from Amazon on occasion) a scratched disc or anything. Fantastic news. Always have and always will like Bestbuy.
prices are high, the company itself seems to have the opinion they are the only retailer in the field which has turned a lot
of customers off.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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