Best Buy tired of being a showroom

The electronics chain hopes some mobile trickery will get customers to the store to actually buy something.

By Jason Notte Nov 23, 2012 3:55PM

Credit: BRENDAN MCDERMID/Newscom/RTR
Caption: People walk past a Best Buy store in New York in August 2012It'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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82Comments
Nov 26, 2012 6:03PM
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Best Buy Execs: For the sake of your employees, suppliers, vendors, and even customers:

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.

Nov 26, 2012 5:28PM
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Went to Best Buy two weeks ago looking for a bluetooth receiver, which I saw online, and the web site said was in stock at my local Best Buy in Barnegat N.J. This is the third time I have gone there to buy something they said was in stock, and get there to find its not. The girl in the department said she never even heard of the item, so she checked at the Geek Squad desk. The guy there said he had never heard of anything like it either. At my insistence the girl checked on the website, and there it was. She checked her computer, and it showed 1 in stock. These computers are always wrong she told me, and it my department, so I would know if it was here. Same old best buy song. Just for fun, i checked through the shelves and there it was, in exactly the place it should have been, with other bluetooth devices. I didn't look first, because I was approached by three sales people the second I stepped onto the showroom floor, so, i just asked if they could show me what I wanted, and that's when it went wrong. Best Buy, you have to get your act together. When your people know nothing about what they are selling, and what it does, something is amiss. You bother people so much when they are browsing, it ruins the entire experience. I dread needing something electronic in a hurry, and having to go to your store. A lot of problems to fix.
Nov 26, 2012 5:23PM
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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. 

Nov 26, 2012 3:46PM
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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.

Nov 26, 2012 3:20PM
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I love this term "showrooming".. haha.. Obviously you have never been in the Automotive Business.. Now buying everything online? Wonder why so many businesses are going out? And why the unemployment numbers aren't coming down? America is destroying itself.
Nov 26, 2012 3:08PM
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Best Buy wants all employees to work a few hours a day five days a week. They offer little to no training. Nobody is full time. All employees are treated like disposable pens. It's the norm in the good Ol' USA, you are getting what you pay for. Sadly the business may go down the tubes because of this short sighted management thinking. 
Nov 26, 2012 2:45PM
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You would think with the name Best Buy you would get at least a good deal but I find they charge more than the MSRP on just about everything and when I e-mailed them about it, the answer I got was that they were free to charge what they wanted, well they are also free to go out of business. I could see if their people knew what they were talking about but sadly most don't and I have told them more than once I don't need your help because I know more about what you are selling than you do. The kicker? they start asking all kinds of questions about your internet service and try to sell you something you don't want or need to the point you have to tell them to leave you alone then you walk out. You think they would have paid attention when Circuit City closed, but they just got worse.
Nov 26, 2012 2:08PM
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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.

Nov 26, 2012 2:05PM
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The solution is very simple.  Best Buy needs to leverage the one competitive advantage item they have over online retailers - person-to-person interaction.  Hire a competent workforce and train them to actually be nice to people and answer questions.
Nov 26, 2012 2:02PM
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My son and wife actually tried to buy stuff . . . . in fact they waited 4 hrs for store to open. Only to be lied to by personal about the availability of the items they wanted to buy and willing to pay cash for. On top of that they witnessed a women in front of them buying a ticket for a large screen TV from a scalper in line before the store opened. They wanted to buy a TV as well but the tickets had already been given out . . . .how many went to people scalping we don't know. This is my second year dealing with disappointment with this chain  . . . we may shop else where next year.
Nov 26, 2012 1:50PM
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If BestBuy wants to avoid showrooming, they can do so easily if they converted their stores into actual working warehouses like CostCo or Sam's Club.

Heck, charge a nominal yearly fee as well.

Don't worry about glitzy displays, special packaging, alternative services, etc.  None of that is useful in capturing a savvy shopper.

If you still want concierge-style service, you can keep small kiosks or "Best Buy Express" stores where you can have your questions answered, bring in items for warranty repair, etc.  But, those stores should be able to be completely self supporting.  Perhaps you integrate the GeekSquad brand into the concierge-style stores and let that revenue support the store itself.
Nov 26, 2012 1:47PM
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Best Buy sucks.  I recently walked into a Best Buy store likely to purchase a computer.  I had questions.  Bust Buy sales people had absolutely no answers.  They didn't even have the little info cards that gave info about the product.  Simple stuff like how much memory or disk space the computer had.  This kind of information that is so basic to making a sale that it's unforgivable not to have it readily available.  If Best Buy wants to stay in business, they really better remember what pre-sale customer service is all about.  Give me a knowledgable sales person and you greatly increase your chances of actually selling me something.
Nov 26, 2012 1:07PM
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I am afraid that I disagree with many of the posts I have always had good customer service at Best Buy, unlike Wal Mart where you need to send things back to the factory for repair.  I do agree that Black Friday is a sham to get people to buy JUNK that they do not need and many times cannot afford.  We set a price limit and watch year around for our gifts for Christmas and birthdays.  If the item the kids or grandkids want is above or beyond that they can have the alternative of the cash that we would have spent and add their OWN money with it to get what they want.  We have always had that policy and it teaches the kids the value of the dollar and how to stay within a budget something all people and our government need to learn. (sorry do not want this to get political just stating a fact)
Nov 26, 2012 12:52PM
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i went to the local furniture store with money in hand to buy a lazy boy recliner and did not purchase a chair because the wait time to recieve the color of the recliner i wanted is 7 to 10 weeks..  I told the sales guy if this is the best he could do i would go home and find it online..  Who waits 10 weeks for a item to be delivered..So not having item in stock just cost this salesman and store a sale...................
Nov 26, 2012 12:21PM
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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.

Nov 26, 2012 12:07PM
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If our society continues to utilize online purchases above showroom shopping we will in fact lose our ability to see items in person. You may think this is no big deal but just wait until it is no longer an option. We will se major problems with on line deliveries as the postal service scales back and we tilt further towards online only. Online dealers will start charging for shipping as you will continue to havre less options. You will also be charged state sale tax on more purchases you have enjoyed tax free. Make no mistake. The on line convenience you have enjoyed over the last several years will lessen greatly as we push our traditional dealers out of the market.
Nov 26, 2012 12:03PM
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Best Buy suffers from extremely poor management.  There is a huge divide between the goals of "Corporate" and the goals of the individual store.  Corporate wants to be the upstanding company where every customer is taken care of, where if the store doesn't have something, they will find another BB that  does, or try to get it for the customer.  The individual stores (many of them) on the other hand, they like to refuse to acknowledge customers unless they are there to buy a warranty, or the service of the day, and that sounds very familiar to a circuit something or other that is now out of business, 
Nov 26, 2012 12:01PM
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I've been doing this for years.... never thought I was so mainstream.
Nov 26, 2012 11:38AM
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The reality is, these days, I don't encounter many retail staff who know their stuff or offer great service. Best Buy is one of the worst, because they offer no better service than a Walmart, and yet they charge more.

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.

Nov 26, 2012 10:50AM
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It isn't rocket science. Provide great service, stop up-selling, provide price based add-on options, price match (at least your own on-line prices), free deliver within 25 miles, and great service.
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