advertisement
advertisement

Best Buy’s Cure For Showrooming? Not Exactly

Written by Evan Schuman
February 19th, 2013

On February 15, Best Buy (NYSE:BBY) put out a statement saying it had ended showrooming, and the sword it said will kill this merged-channel dragon is a new price-match program. Despite quite a few reports that Best Buy was making the price-match it launched in 2012′s holiday season permanent, the new program—set to kick in March 3—has very little in common with its holiday price-match effort.

First, this program will clearly not eliminate showrooming, and Best Buy knows it. The new program cuts in half how long regular shoppers have to return merchandise for refunds, from 30 days to 15 days. The rest of the changes are making the program much stronger, eliminating many of the non-shopper-friendly elements from last year, such as making the price-matches conditional on associate discretion, limiting price-matches to appliances and electronics hardware, and even exempting all electronics accessories.

Is it a better program (other than the strange halving of the time for a return)? Absolutely. Will it likely reduce Best Buy sales lost to showrooming? Yes. Will it eliminate all showrooming losses? Of course not. And the fact that Best Buy is trying to argue it will is mind-boggling.

The chain has done something good, and it can rightly brag about the changes. But why exaggerate it to the point of absurdity? One small restriction might give a clue as to Best Buy’s thinking.

The restrictions on the new price-match program are generally quite reasonable: at time of purchase only; items must be “new, identical, immediately available” from a local retailer or from a list of 19 E-tailers; one price-match per identical item per shopper; and these additional exemptions—”Mobile phone devices and plans, the online prices of retailers not listed, the online prices of third party vendors (Marketplace vendors) on designated major online retailers websites, post purchase price match requests to competitor’s prices, Best Buy for Business, offers that include financing, gift card offers, bundling of items, free items, pricing errors, mail-in offers, coupon offers, competitors’ service prices, items that are advertised as limited-quantity, out of stock, open-box, clearance, refurbished/used items, our and our competitor’s Deal of the Day, daily deals, special hour sale event items and credit card offers, BestBuy.com Clearance & More and Marketplace items, and items for sale Thanksgiving Day through the Monday after Thanksgiving.”

As for those E-tailers that will be matched, the list is similar—but not identical—to the one Best Buy used in November. Gone from the new list will be CircuitCity.com and Compusa.com and added will be Frys.com, making the list one fewer than last year. (The full new list will be: Amazon.com (NASDAQ:AMZN), Apple.com (NASDAQ:AAPL), Bhphotovideo.com, Buy.com, Crutchfield.com, Dell.com (NASDAQ:DELL), Frys.com, hhgregg.com (NYSE:HGG), HP.com (NYSE:HPQ), HomeDepot.com (NYSE:HD), Lowes.com (NYSE:LOW), Newegg.com, OfficeDepot.com (NYSE: ODP), OfficeMax.com (NYSE:OMX), Sears.com (NASDAQ:SHLD), Staples.com (NASDAQ:SPLS), Target.com (NYSE:TGT), TigerDirect.com, and Walmart.com (NYSE:WMT).)

But one other requirement is that price-matches will only be offered to shoppers who think to ask for it. Given that it’s the shopper who must produce the proof of the competitor’s price and specs, it’s obvious that the shopper has to bring it up. This also raises the obvious question: Best Buy already knows what that list of rivals is selling these products for. If the chain is prepared to match those prices, why not do it directly, sparing the shopper the effort and uncertainty? Wouldn’t that send the strongest message that Best Buy will no longer be out-priced and that shoppers can trust them?

Also, this approach assumes Best Buy is the final stop—rather than the first. If shoppers are starting their purchase research at Best Buy, which is the essence of showrooming, the price-match policy doesn’t help them. (Maybe if they are doing on-the-spot product comparisons by using a mobile device and hitting Amazon, this could help. But most shoppers will continue their price explorations at the office or at home, possibly days later, in an environment where note-taking and even frequent bookmarking is a lot easier.)


advertisement

2 Comments | Read Best Buy’s Cure For Showrooming? Not Exactly

  1. Earl Says:

    I agree, for Best Buy to claim that it’s eradicating showrooming with its customers is a bizarre claim, and bit arrogant. It’s not enough to match the competitors price. They have to beat it and go beyond. Once a comparative analysis is being done by a customer, there’s little left for Best Buy if they don’t differentiate themselves from whatever competitor they’re trying to match. Until retailers remove “friction” from the purchase process, consumers will continue to go to where the “friction” is lowest and the benefit to them is the greatest…

  2. Bill Says:

    Sorry Best Buy but it’s to little and to late. Best Buy can offer customers a Victoria’s Secret Model to escort them while shopping and it won’t bring in the customers or save Best Buy. Consumer’s have a long memory when it comes to bad treatment and BS when returning items. The writing is on the wall and Best Buy should plan for the going out of business sale like Circuit City. You won’t be saved by the consumers! You caused your own demise. You will be missed as much as Circuit City.

Leave a Reply

Readers, specifically those who want to comment on a story:
Our Comment SPAM system is getting very aggressive these days and has been blocking legitimate comments. If you post a comment and don't see it appear within 2 hours or so, can you please send a heads-up to customer-service@storefrontbacktalk.com? Ideally, please include the time you posted the comment. That will allow us to try and hunt for it. Thanks! P.S. We're working on fixing the system, but we don't want to lose any valuable comments in the meantime.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 17,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.