Best Buy tired of being a showroom
The electronics chain hopes some mobile trickery will get customers to the store to actually buy something.
It's not consumers' fault that their smartphones know more about the items on Best Buy's (BBY) shelves than the blue-shirted folks selling them. It's when consumers use their devices to buy those items for less online that Best Buy has its perfect scapegoats.
"Showrooming" says so much about where we're at as a retail culture. Consumers haven't grown so lazy that they're completely unwilling to go to a store, but they've grown so accustomed to online pricing that they're no longer willing to pay extra for store amenities like leases, lighting, security and a workforce of not-so-knowledgeable folks in uniform. For Best Buy, it's a conundrum that's costing the company millions.
According to AdAge, Best Buy is partnering with Nashville startup edo Interactive to monitor customers' credit card spending and send them online deals they can access using the same cards. Just accept the deal on your computer or mobile phone, swipe your card at the store, take your item and go. It keeps folks in the store, and Best Buy is hoping it will stop them from showrooming and get them to take something home for once.
Good luck with that. Market research firm NPD Group found that 15% to 20% of consumers showroomed stand mixers, electric knives, sewing machines, floor cleaners, power tools and other items in 2011. IDC Retail insights estimates that 48 million U.S. shoppers will showroom items this holiday season, up from 20.5 million in 2011. The group estimates showrooming could influence as much as $1.7 billion in purchases this holiday.
A survey released by CouponCabin in October found that 40% of smartphone or tablet owners used their devices in a store to compare prices. Of those, 97% of those people bought the products online for less.
This isn't really news to Best Buy, which closed stores this year and saw same-store sales fall 4.3% last quarter. That led to a net loss of $10 million on the quarter and led new Best Buy chief executive Hubert Joly to take drastic steps like vowing to match prices from online retailers like Amazon (AMZN), NewEgg and others through Dec. 27.
Competitors have taken notice, as Target (TGT) launched a similar price-matching policy that is in effect only until Dec. 16 and began allowing customers to scan items from its store and buy them cheaper on its own website. Wal-Mart (WMT), meanwhile, is testing single-day shipping to take on Amazon Prime. It's an uphill battle for the brick-and-mortar retailers, as the National Retail Federation says 51.8% of consumers plan to do their holiday shopping online this year. That's the first time more than half of shoppers have committed to buying gifts online, and many of them are going to be in the very stores they're shunning to check out the merchandise.
Best Buy can try to trick them into leaving with something they'd like, but years of pushy and oblivious salespeople, unnecessary money-grabbing computer "optimization" by the Geek Squad and remarkably lower online pricing have conditioned consumers in a way gimmick offers never could. When Best Buy offered no service to speak of, it made price the all-important factor the company's name suggests. When those prices aren't low enough to make up for Best Buy's myriad shortcomings, customers accustomed to ignoring staffers and leaving empty handed will have no problem dropping by Best Buy's costly showrooms just to take a few measurements.
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Read these comments. Internalize them. There's a theme here if you choose to understand. You're making the most basic, fundamental, arrogant, and greedy mistakes that will put you out of business.
I won't hold my breath. You 'll probably blame it on a bunch of BS excuses like unfair competition, unions, etc. , pull your golden parachute, and go screw up another once good company.
Brick and mortar places get my money AND my online business when they earn it. In the Chicago area, I spend my money at Abt and Costco...both in-store and online. Great prices AND great service when you need it.
Best Buy and WalMart are great examples of places that don't have great pricing and without the selection or service to make up for it.
Best Buy should look at Frys, who do price match their main online competitors. They also have a better selection of items. Best Buy used to be one of my main go to places, but they seem to be suffering from an identity crisis. They are bigger than a radio shack, but not really a big box store... in the end they don't seem to know what they want to sell and to whom...
However, in the end none of this matters as the consumers have already lost. Online no longer has great deals. Companies have become wise and now mark their products with different model numbers depending on which store is selling it. So stores (online or otherwise) can offer price match without much worry, as they know they are likely the only or one of few stores selling that actual model. In the end, it's all about big business...so think this holiday season, not what you want, but what you truly need.
It has nothing to do with being lazy. If it's something I can walk into a store, pick up off the shelf and purchase at the counter, I prefer that over having it shipped to my home where it can be damaged in transit or stolen. But when it comes to a big ticket item, when you have to wait upwards of an hour to speak to someone, much less wait for them to get the item out of the back, then there's even more rigamarole involved in getting you to sign up for unneccesary warranties (Do I want to buy ___? Yeah, Whatever, I'm just trying to get out of the store.)
Secondly, there's a better selection online. If what you are looking for is not on the shelf, then, again, you have to wait for the lone sales associate to get through with the five people that are ahead of you so he can go look in the back and see if they have more in stock.
If they don't want to be a show room, they need to do a better job of stocking the floor and a better system than one associate-per-department.
Movieboy.....You are what you are, a f**king idiot, with moronic statements...
You and your ilk are what's wrong today with the Society...And will be the downfall of it.
If I'm going to pay a retail markup, I expect something for it. Service, selection, product knowledge, something. Otherwise, I'll buy online. Researching a product or even a whole industry is pretty easy now.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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