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 23, 2012 7:25PM
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I think all this holiday shopping crap is nonsense, and the worst culprit is the stores themselves. For instance, Sears advertised a 50" Toshiba LCD television for it door buster last night when they opened, but they damn well knew they only had 5 of them. I knew better, but a friend went and tried, was he ever disappointed and mad, which results in him never going back to Sears again, and from what he said, a lot of folks left the store feeling the same way. I am sure there were the same feelings at all these BS black friday sales. Greedy merchants, frugal shoppers, you deserve each other, Christmas is about celebrating the birth of Christ, not filling the pockets of all the fat cat retailers, or adding another unnecessary material object.
Nov 23, 2012 8:54PM
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Ive gone to Best Buy store not too long ago to purchase something on THEIR own website, the price in the store was higher than their own site. And they wouldn't price match it! Best Buy wouldn't price match Best Buy.

Dont let the door smack you on the **** on the way out.

Nov 23, 2012 5:35PM
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Bestbuy prices needs to be cheaper or bankruptcy like circuit city is the future.  
Nov 23, 2012 10:29PM
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If stores like Best Buy had the most knowledgable and friendliest employees with GOOD customer support, they would be to their market what people claim Apple is to theirs.  As it is, many shoppers loath to deal with the employees at stores like Best Buy so they prefer to shop online.  Add to this the convenience of shopping at home in your boxers and it is tough to convince someone to get dressed, drive to the mall, fight for a parking space, fight the crowd into the store, fight the crowd in the store, search for what you want, discover it is sold out, and turn around and leave.  I tried to buy a laptop once at Best Buy.  It was in one of those torture cages they use.  I asked if I could hold the laptop to see how heavy it was.  The MANAGER said no.  He would not take it out of the display cage.  Guess what?  A competitor got my money.
Nov 23, 2012 6:58PM
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One important factor overlooked by other posters so far has to do with sales tax.  Even if Best Buy matches the on-line seller's retail price, they still have to add on sales tax which, except for Amazon in a handful of states, on-line merchants don't do.  
Nov 23, 2012 5:52PM
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Best Buy has price matched fellow brick and mortar stores for ever but wouldn't price match online shops. I've always thought they should price match with a small premium say 5%. I think you would find most consumers would pay a small premium to online pricing to get the item today vs waiting for it to ship. Now they have waited so long to address online competition, their stores are hurting and they are talking about matching the price. We will see if it is too late or not and how bad a full match hurts profits.
Nov 23, 2012 10:10PM
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Brick and mortar are costly.  Building, real estate taxes, electric, and people to sell, drive up costs.  Today most people know what they want and can have it shipped sales tax free right to their door.  That is a hard business model to compete against selling COMMODITY items. 

 

All brick and mortar stores will face this transformation. 

Nov 24, 2012 4:39AM
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I'm glad to see Best Buy getting beat up. As stated in the last paragraph, I experienced  "years of pushy and oblivious salespeople" at nearly every Best Buy I visited, and did my best to not shop there. The salespeople were more interested in talking to each other than being helpful.
Nov 23, 2012 7:49PM
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@Chet

This has nothing to do about unions.  Best Buys sales are down because they offer special online deals and not in-store, and they do not price match other sites online, and now complains folks don't buy in store.tions screw you out of. 

It is amazing how you close-minded right-wingers want to blame unions for everything corporations screw you out of while taking advantage of and enjoying all the good things they provided for you.

Nov 23, 2012 7:37PM
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Ridiculous, Best Buy's products are priced very well as I still bought a new camera online from them, because I know if I have a problem I can bring it back to the store.  I can also change my mind and buy something else at the store.  Bricks and mortar are better for electronics purchases for sure, but they must improve the store experience and treat their online customers as well or better than they treat their walk-in clients.
Nov 26, 2012 10:44AM
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I recently was in need for a new compact/stackable dryer after mine crapped out on me earlier this year. I shopped, Sears, BestBuy, HHGregg, Lowes, and Home Depot. Best Buy had ONE option for me. Sears had nothing but the Whirlpool/GE stacks that were built together as one unit. When I told the guy at HHGregg what I was looking for, he kept taking me to full size units (SIR< THIS WON'T FIT IN MY LAUNDRY CLOSET). Lowes had very limited selection and the highest prices (even higher than Best Buy, holy crap). And the guy at Home Depot was a damned moron, he just didn't even want to help me.

The problems with these stores IS THEIR CUSTOMER SERVICE. After essentially no one was willing to help me or no one had what I needed, I found what I was looking for online. Isn't that shocking? Now it did happen to be in a true brick and mortar store; it was at a Sears outlet in Greensboro, NC, which is a 3 hour drive from me in Myrtle Beach, SC. The people there were actually very helpful, very friendly, offered 0% financing (I should have taken the 5% discount as I paid it off in one payment), and have since ACTUALLY CALLED ME to make sure I was happy with my purchase. It is very sad that good customer service is shocking to people anymore.
Nov 24, 2012 1:44AM
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I generally prefer to "showroom" on-line and buy at the store. I want to see and "finger" what I'm buying, not to mention the convenience of having what I'm buying today and not having to hang out at home to take delivery when UPS/FedEx/USPS shows up whenever on whatever day, which is almost as bad as waiting for the cable-guy. I don't mind paying a little extra for these conveniences.

 

My local Best Buy has always price-matched at least their own on-line prices, so I have no complaints there. On the other hand, I was a little put out when I bought my last TV and Blu-Ray player from them...which were on-sale, for prices that was the same or better than on-line, and the sales tax was less than the shipping would have been from an on-line purchase. However, the sales guy slipped in an HDMI cable that I didn't ask for ($99.99) and didn't realize was there until I got home. (No, I wasn't paying attention when I signed for the credit card purchase, my bad.) When I discovered it, I went on-line, bought 2 HDMI cables from NewEgg for less than $10 each and took the one I had, unopened, back to the store. Best Buy took it back and refunded my credit card with no questions asked. A Best Buy horror story? No. In retrospect, kind of funny. I still do business with them.

 

Regarding the HDMI cable, it is worth noting that I knew the cheapest one Walmart had was about $25 and was not the HDMI 4 (3-D capable) cable I needed. When the difference between in-store and on-line prices show this kind of disparity, I go on-line every time.

Nov 23, 2012 7:47PM
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Even though I do not have one, Best Buy needs to give their credit card holders lower interest rates, deals for using the credit cards. They need to draw people in with constant incentives, not on lower grade stuff that no one wants except on Black Friday. The markups are ridiculous, they don't have items in stock. If I want to wait for shipping I will order it from somewhere that has it cheaper. They have even gone as far to have items that are sold by third parties on their website at prices higher than I can get elsewhere. Brick and mortar used to mean convenience, its not convenient if you don't have it and I have to wait anyways.
Nov 23, 2012 4:50PM
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If you really wish to sink the company you are working for, bring in the Union and it's for sure to happen in time.
Nov 24, 2012 9:54AM
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Best Buy is on its way out.  Not to sound like a cranky old codger, but Im not a huge fan of their ads telling Santa to watch his back either.  They feature some portly housewives playing tricks on Santa, basically insinuating that Thanks to Best Buy, Santas help is no longer needed. 

 

That and the horrendous customer service coupled with MSRP's when its all widely available online, I give them three years. 

 

Good riddance to bad rubbish.

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.
Nov 26, 2012 10:49AM
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Sears in my area had 20 of the TVS  with 1000 people in Line come on  be smart give up your Thanksgiving for a crappy 500 dollar tv for 300.00

 

I have better things to do on Thanksgiving.

If people stopped wishing for something for nothing the stores would not run the ads..

You cannot expect the stores Best Buy Srears  etc   to give away Millions of TVS  at huge losses...

if they do it will soon be on line only.  the TV is crappy anyway.

Spend 500 get a nice Plasma.

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 8:44AM
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black friday 2012 went to my local howell,nj store to purchase a camera priced online at their website-only one camera was functioning all cameras had run out of battery life-asked saleshelp for assistance-oh sorry! nothing they could do batteries ran out-really! all the items i was looking at were priced higher than THEIR website-really? went home checked prices again ordered online and went back to store for pick up-received lower price-called manager over to complain prices did not reflect what was advertised online in the store-thanked me for my feedback and asked me if I had an android app scanner on my phone because that's what he uses- really!  sorry for the inconvenience-with over 30 employees in the store you would think each of them would have their web and flyer information in hand to offer assistance? with over 20 years in retail management i have never seen such a mess-management wake up!!!!
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.

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