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.)

Pages: 1 2

Posted in E-Commerce, In-Store, IT Strategy/Industry, Mobile/Wireless/Contactless
advertisement

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

  1. Earl Says:
    February 21st, 2013 at 10:52 am

    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:
    March 30th, 2013 at 1:05 am

    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.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

"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." -Marc

Will Warranty Enforcement Be Amazon Marketplace's Achilles' Heel?

Nathan
I buy most of my nerd toys on Amazon and I had never stopped to consider that I may be shooting myself in the foot in terms of warranties. I'll have to make a point of checking the seller's info to confirm they are authorized distributors (at least for high-ticket items). Thanks for the head's up! Read more...

When Replacing NFC, Tech Is Really Not The Issue

A reader
Folk wisdom on the net suggests that if you are given a "free" product, look carefully at the terms because you are no longer the consumer - you are the product. If Google offered free readers to merchants, what would they be getting from those merchants? Data. They would be able to close the loop on when and why customers who research on line buy from a bricks and mortar store. This would enable Google to know retailer price points, which searches are most effective to get those products in front of on line advertisers, and to be able to sell that advice to others. Not every retailer would want to provide such data to their competition. Read more...

Court To Fed: Keep The (Inter)Change

terry
This was an easy way for merchants to effectively directly remove money from a customer’s bank account. The risk of default was low, as was the cost of processing. Merchants had to install new PIN-based POS terminals, but many banks and acquirers helped to subsidize these costs by setting the interchange fees at “par” (no fee) or even reverse fees as a subsidy. Read more...

Walmart Sales Tax Snafu: How Did They Get This So Wrong?

Paula
I've been in the industry for a thousand years and didn't know about these "collection fees". Actually checked with my former boss, a COO of a major multichannel retailer, and neither he nor his CFO knew about it either, even though his company is taking advantage of it in a couple of states. Read more...

PCI's Not-So-Open Global Forum

Marc
I agree with your premise that the PCI SSC needs to do a better job of communicating with POs. I don't agree with your QSAs interpretation of PA-DSS requirements. 4.2.7 is not specific to user accounts with user databases. "4.2 Payment application must provide an audit trail to reconstruct the following events: 4.2.7 Creation and deletion of system-level objects within or by the application." The standard interpretation, in my experience, is that the application must provide an audit trail for system events. Read more...
Stephen Ames, CISA, CISSP
I received confirmation from the PCI Council's director of data security standards that my PA-QSA was not exacly spot on with his guidance. Without getting into too much detail, my application in question is compliant with PA-DSS 4.2 out-of-the-box. I'll be having a conversation with my PA-QSA about this. Read more...

Why Did Gonzales Hackers Like European Cards So Much Better?

David True
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...
Marc
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...
Biff Matthews
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...
Mimi Hart
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...
A reader
@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...

Changing Terms of Service? Be Ready For A Class Action Lawsuit

Bernard Regier
Very enlightening article. In regards to policy statements/terms of service, why hasn't Craigslist been sued up the wahoo for not allowing users to cancel their memberships? Of their many uncouth business practices, including complete lack of accountability and doling out strange, arbitrary punishments to out-of-line members(see customerservicescoreboard.com for 8-9 hundred horror stories), disallowing individuals to terminate service seems the most unlawful. I don't know anything about contractual law or online regulations, but If I owned a store, I could refuse or restrict service to anyone or lock them out if necessary; what I CAN'T do is lock them in!Your thoughts? 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.