Before the holidays, Best Buy began using showrooming to its advantage by launching an ad campaign touting its stores as “the ultimate holiday showroom.” According to the CEO of Best Buy, Hubert Joly, Best Buy “loves showrooming” and are embracing the phenomenon with gusto.  Best Buy is implementing strategies that include price matching and customer-service improvements to convert showrooming shoppers into in-store buyers.

Studies suggest that last year’s fears of showrooming might have created excess panic. Still Best Buy’s sales suffered all year.  As the Internet’s share of consumer purchases continues to grow, with more than a quarter of U.S. consumer’s electronic purchases occurring online,  showrooming is, and will continue to be, top-of-mind for many retailers.  For example, Walmart tries to use reverse showrooming to its advantage by drawing customers to its stores for the best price.  Reverse showrooming occurs when shoppers explore products online before purchasing in-store.  Target has installed Wi-Fi at its stores to facilitate customer browsing.  This also allows Target to track customers spending and search habits.

According to Best Buy, one in five of its 600 million visitors came to the store with the intention of making a purchase online last year.  Customers want to come into the store and see how products feel, but then search for a better price online.  To combat that, Best Buy has instituted a permanent price-matching plan to reduce showrooming and online rivals from undercutting it on price.   Best Buy also wants to create a competitive advantage by capitalizing on the traffic that comes into its stores.  Its current marketing push is designed at reaching more sales per square foot of floor space.

Although revenue at Best Buy is down and is up at Amazon, retail analysts suggest that sales will continue to improve at physical stores.  There will always be those customers that want the face-to-face interaction.

Discussion Questions:

What is Best Buy doing to combat showrooming?

Will it be able to survive Amazon?

 

Source: Drew FitzGerald, Wall Street Journal, November 5, 2013