Best Buy’s Cure For Showrooming? Not ExactlyWritten by Evan Schuman
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.)