SHOWROOMING

AT BEST BUY
The Issue – How E-commerce Is Affecting
Retailers
 Online retailers designed the mobile apps to give shoppers an easy
way to search online for the product at best deals. This way there
are no customers for the retail shops.
 Even if the mob visit the retail shop, it is only for personally trying out
the product they’ve checked online and not for buying them.
 Thus the retail shop traffic is more, but the sales was in a sobering
situation.
 It became difficult for traditional retailers to compete in a world
where shoppers could easily see competing prices, offers and also
when they could have a free home delivery.
About Best Buy

 Best Buy Co., Inc. is an American multinational consumer

electronics retailer headquartered in Richfield, Minnesota. It was
originally founded by Richard M. Schulze and James Wheeler in
1966 as an audio specialty store called Sound of Music. In 1983, it
was re-branded under its current name with an emphasis placed on
consumer electronics.
Affected & Effected
AFFECTED EFFECTED

Online retailers has created Amazon was one of the companies

transparency between retail pricing. which was most successful in pulling
Customer visited the stores visited the the customers away from the
stores just to view and test products. traditional stores.

The unemployment was increasing at By the end of 2011 more shoppers

a higher rate as people saved more began their search on amazon rather
and spent less in stores. than searching in google.

The shareholders were incurring heavy After the success of its retail website,
loss and their profits were going down. they launched apps for comparison,
The target sales was getting flat with mobile app and a simpler app called
no increase in revenue. flow.
 Best Buy’s Response

 The company tailored its in-store barcodes to block customers

attempting to showroom using mobile apps.
 It offered products only available at Best Buy, such as exclusive
editions of Blu-ray movies.
 The company then created its own shopping app.
 It also partnered with the third party apps in an attempt to win
mobile savvy customers back to its own brand.
 The company took the extreme decision of always matching lower
prices that shoppers found elsewhere.
 Should Best Buy Retain Its PPM
Policy?
 Yes they should retain the PPM policy.
 It means you're constantly on the lookout for the best pricing
strategy to appeal to your target audience. One
such strategy is price matching. This is when one retailer agrees
to match a lower price from a competitor, typically if the shopper
presents evidence of the better price
 Because when other retail shops remove their discounts and deals
after the festival season and Best Buy keeps the discount price, the
people who are willing to buy in the retail shops would obviously
prefer Best Buy.
Strategies That Can Be Opted By
Best Buy
 Educate your customers about why your products are worth
buying.
 Create a membership program. Why not turn customers into
members and give them benefits at the end of the year.
 Stock different merchandise. If a shopper can get exactly the same
merchandise online at a lower price, it's easy to comparison shop.
So look for items that are unique or special in some way.