Best Buy mulls streaming online prices directly to stores
- Blog Post by: Thomas Lee
- July 2, 2012 - 3:52 PM
Best Buy Co. Inc. has made a top priority of ending “showrooming,” the idea that customers visit a store only to buy the merchandise later on a competitor’s website.
In truth, though, showrooming is less of an actual problem than it is a perception problem. Analysts say Best Buy, given its size and heft, offers prices that compare well or even better than the competition. Over the years, Best Buy has even considerably weakened Amazon’s sales tax advantage—that Amazon offers lower prices because it mostly does not collect sales taxes.
But perception often becomes its own reality. So to combat that perception, Best Buy will soon adopt a more aggressive “we have nothing to hide” posture.
Executive vice president Stephen Gillett, Best Buy’s new digital chief, recently told institutional investors the company might install screens throughout its stores that display real time prices on products offered by competitors like Wal-Mart and Amazon. The screens would also offer product reviews.
So say if you walk past a display featuring Sony televisions. There would be a screen on the display that shows other retailers’ prices for that same product at that very moment.
Of course, Best Buy runs the risk of competitors actually offering lower prices. But the company is betting that the price gap won’t be so big that the customer will leave the store.
Best Buy is essentially using to its advantage the very technology that has fed this showrooming perception.
In the past, customers would need to believe a store had the best prices or drive to a bunch of other stores to verify it. Today, customers just look up the product on their iPhones and instantly compare pricing info as they walk through the aisles of a Best Buy store.
According to a recent comScore survey, 72 percent of consumers who engage in showrooming do so because they believe can find better prices online.
To which Best Buy will answer: “Bring it on.”
© 2013 Star Tribune