Showrooming in BestBuy
"Showrooming" was considered the new consumer behavior after E-commerce (online retail market) has emerged which was expanding at a rate of 17% per year. "Showrooming" is when shoppers enter the physical stores to view the features of the products in which they want to buy and they would leave the store and purchase the products online for lower prices. This consumer behavior poses a great threat on the brick and mortar retailer stores by creating an alternative to buying products for much lower prices which impacts a number of sales the retail stores are making. Another factor that contributed to the concept of showrooming was the new price matching mobile applications which allowed consumers to make price comparisons
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With customers showing up at their stores to only test the products ' features, best buy as a result, had a loss in their sale. The impact of showrooming has created a challenging task for best buy to keep their sales up and to also keep their customers in the store to purchase their products. First best buy had to better understand their customers’ behavior to come up with the best solution. After a survey was done they found that the main three reasons customers were showrooming was for better online prices, the desire to view the product in person before ordering online and to also buy the product without issues with out of stock retail stores. To complete the task best buy announced that their store was going to match their prices with major online competitors such as Apple and Amazon and retail …show more content…
The price-matching policy has its negative effects but at the same time, it gives best buy to option to retrieve its sales among the new online competitors. As a CEO, I would keep the permanent price-matching because it’s one of the few reasons why customers would visit the store and buy the product they need for a reasonable price. Also the fact that price-matching might seem more convenient for the customers since there is no need to wait for the shipment of the product because not everyone can afford Amazon prime to get their products shipped soon enough. Another reason why I would continue the policy of price matching is that there are more benefits that the company can gain if they price match the showrooming products and at the same time place non-showrooming items with higher prices so that the company can gain back the sales they have lost as they purchase the products from the store. Customer service also plays a very important role when it comes to convincing customers to buy from the store because shopping is not always about getting the best price but also about the shopping experience. Many people value the idea of going out shopping and physically seeing the products in which they want to buy, so if they have the great experience along with that, they will most likely prefer to buy from the
Best Buy has grown as a company since 1966 to today. They sell much more products than they did in the past. Best Buy today sells several of things like TV’s, cameras, movies and games, mp3 players, DVD and Blu-ray players, and the list could go on. They sell more than just electronics. They sell items for the home and office, small and large appliances and fitness technology. Best Buy even offers services like Geek Squad, repair for all sort of items, delivery and installation; trade in center (only in certain areas) and cell phone services (AT&T Wireless, Verizon Wireless, Sprint, Boost Mobile, and T-Mobile).
Amazon.com operates in the Online Retail Industry. The sector is one of the fastest growing globally and is outperforming the ordinary retail marketplace. It was created after 1995 and it was only the Internet that made it possible for such an industry not only to be established but to become one of the most flourishing sectors in the business environment. What is interesting is that Amazon.com, together with eBay is the pioneer in the field. Both companies were launched in 1995 and are still extremely successful. The creation of e-mail in 1996 had a huge impact on the development of online retail by introducing a fast and easy way to communicate with customers. For this two-year period Internet usage doubled annually, thus, allowing for the expansion of the industry. Google is launched a year later, in 1998, only to become the most used search engine in the world and an essential partner for the online retailers by helping them tailor their websites to customer’s personal preferences and by advertising. After that, more and more people see the opportunity in the growing industry and enter it. By 2001 there are more than 513 million Internet users globally, which calls for action in terms of creating regulations and laws to protect the users and personal property. In 2003, Apple launches iTunes, and provides a platform for low-cost digital downloads. Another major change is the appearance of social media from 2004, which is one of the biggest influencer on the state of the industry. With the launch of iPhone in 2007, this trend strengthens as people get to enjoy the Internet anywhere they want to. From then on, technological advancements have made it extremely easy and fun to shop online, making it ...
In 2010, for instance, Wal-Mart racked up over $400 billion in sales. Instead of offering just selected items at a low price to bring in customers, Wal-Mart uses its massive buying power to force supplier companies to become more efficient and sell products at a low price all the time. (Huebsch, n.d.). Thus, Walmart strategy is firstly oriented towards low prices. In order to reach it, it has to work more efficiently than its competitors, lower the costs inside the company and also the prices of the supplier provided products. In a company, which has chosen low price strategy, one should not expect high salary or the best customer service (Stankevičiūtė, Grunda, & Bartkus, 2012).
Best Buy, one of the biggest consumer electronics retailers in the world, provides products from smartphone, computers to large electronic appliances. It aims at offering a large variety of products with outstanding customer service at a comparably economical price. Yet, it has been facing internal and external challenges in the recent years. Bottom line and the share price are slightly catching up after a fall in 2013 but still barely satisfying the shareholders and customers are changing their purchasing habits which may threaten its future.
Best Buy’s History & Main Characters: Best Buy is Minneapolis-based and is North America's leading specialty retailer of consumer electronics, personal computers, entertainment software and appliances. Throughout Best Buy's 37-year history, the company has maintained the tradition of making life fun and easy for customers and employees, while providing a significant return to partners and investors. It has 80,000 employees and over 550 stores in the U.S., in addition to the brands Best Buy Canada, Future Shop and Magnolia Hi-Fi. Their leadership is led by Dick Schulze, Founder and Chairman, Brad Anderson, Vice Chairman and CEO, Al Lenzmeier, President and COO, and Darren Jackson, Executive Vice President of Finance and CFO. Chairman Dick Schulze founded Best Buy in 1966 with the Sound of Music, an audio component systems store in St. Paul, Minn. In 1973, Vice Chairman and CEO Brad Anderson joined Sound of Music as a salesperson. The company quickly expanded into video products and computers, was renamed Best Buy in 1983, and became a public company in 1985. Best Buy’s revenues for fiscal year 2003 were $20.9 billion and net earnings of $622 million. It was ranked number 91 on the Fortune 500 in 2003 (Bestbuy.com). Best Buy stores are redefining the way customers shop by offering an unparalleled assortment of affordable, easy-to-use entertainment and technology products and services available through its network of more than 550 retail stores in 48 states and online at BestBuy.com. Best Buy is scheduled to open 60 new stores in fiscal 2003 and is on track to have 650 stores by fiscal 2005. Magnolia Hi-Fi is a high-end electronics retailer specializing in audio and video solutions for homes, ...
Study of Impact of Product Placement in Films / TV Shows on Consumer Behaviour. Introduction Placing a brand in media content to affect consumer behaviour is defined as Product Placement. N. Jay, C. T. Salmon, and S. Chang, “The hidden history of product placement,” Journal of Broadcasting and Electronic Media, vol. 78, no. 1, pp. 137-137, 2010.
Another part of Amazon’s retail strategy is to serve as the channel for other retailers to sell their products and take a percentage of cut of every purchase. Amazon does not have to maintain inventory on slower-selling products. This strategy has made Amazon a ‘long tail’ leading retailer, expanding its available selection without a corresponding increase in overhead costs.
Based on Best Buy’s customer base, I do not feel that the company does the best at marketing its products and services. I would recommend that Best Buy’s research and development team strategically locates where their customer base of Urban Trendsetters, Empty Nesters, Middle America, and Upscale Suburban consumers live. The company’s research and development team should also find areas where income levels are average or above. Areas where those two categories overlap should have intensive marketing. Television and radio advertisements in those areas expressing Best Buy’s expert advice, current deals on products and services, and a newly reconfigured online shopping experience should produce the best
The vendors had little choice in the matter and had to do what the Target Corporation said because of them being the second largest discount chain next to the Walmart Corporation (Levinthal, 2012). The Target Corporation had a problem that they had to face because they failed to address the main problems that traditional retailers face because online-only retailers had very low labor costs and did not collect sales tax in many states (Levinthal, 2012). The Target Corporation eventually launched and upgraded its website and has operated by Amazon (Levinthal, 2012). Amazon is a place online were customers can find and discover anything they might want to buy online at lowest possible prices (Amazon.com, n.d.). Cloud data storage and fees that Amazon charges others to sell on its website makes Amazon products sell so cheaply which subsidizes the rest of its business (Levinthal, 2012).
The nature of the business of retailing puts retailers at a assumed risk of incurring costs because products are bought with the assumption that consumers will purchase. Additionally there are external factors that may also pose risks such as natural disasters, theft, spoilage and fire. In other circumstances retailers also extends financial credit to customers in the form of credit sales which facilitates the smooth transition from retailers to the marketplace. Retailers are in constant contact with customers which gives them the opportunity to research and study buyer’s behaviour. This involves collecting information about changes in customer preferences, perception and shifts in the demand curve. Through advertising within their stores retailers are able to exhibit and introduce existing and new products to the marketplace. Ultimately retailers are in the business of selling products to customers to achieve their goals of generating
Mobile phones are long range, portable and wireless electronic device of communication. It is a part of introduction of new technology are influence the most of the restaurant business. The term “m- Commerce” stands for mobile commerce. It is the buying and selling of goods and services through portable devices such as cellular phone, personal digital assistance (PDA), smart phone and any other handheld devices rather than desktop or laptop computer. M-Commerce is a new channel or medium for commerce, presents unique feature such as ubiquity, personalization, flexibility and localization which are not available in traditional e-commerce, therefore has an opportunities for diverse functionalities and applications by providing customers with
The sales personnel / shop owners told during the discussions that the e- retailing has definitely affected the market and the people have developed high negotiation skills over a decade after seeing the offers online regarding various electronic gadgets and electronic equipments. This increasing competition has also forced them to keep their stock update at all times to meet the needs of the consumers. Often there are situations when the product demanded is not available for sale at the counter but only at the online portals. This situation forces customer to wait for some days depending on delivery schedule. Some of leading e-retailers have also started taking preference delivery charges additional to cost. This has started embarrassment to customer. This situation is usually favorable to retailers. The Kanpur retailers are smarter in this situation and provide product to customer within few hours or day. The strong retailer nexus play a crucial strategy at local level to bind outgoing customer. The after sales service is also a key strategy in electronics retail business. When the service issue occurs in online purchase of electronics products, the retail counter is not able to help the customer and as a result the customer gives bad word of mouth publicity for the counter. In some cases, local distributors have
As the author of the article concedes, the online shopping has flourished in the past years. Many customer have seen the advantages of e-commerce in the ways of time and money saving. Whit a simple click on the keyboard the goods are uploaded in a virtual cart and from there are delivered to the customer address. Also, the online stores have the opportunity to create a customer database and a customer profile. The customers receive periodic reminders of the new offers and sales via email or mobile phone messages. In the meantime, many classic stores have struggled to maintain the business keep up. According to the article, the brick and mortar stores will implement new features that conduct customers to an easy and pleasant shopping. For instance, the retailers will use the customer mobile phone as a concierge application. The customer will be informed about latest products and their availability. Furthermore, the customer will have the possibility to track needed items inside the store with the help of store mapping and products locations. If the customer will change the shopping list, the app will provide the route to the new item. Also, when a customer will passing a store the app will remind the last customer visit into the store and
The high take-up of the Internet leads to variety of opportunities in front of companies. People are more online than ever. They spend many hours each day on Social Networks such as Facebook and Google+. It is no wonder that buying and selling can now be done in a more convenient way. Although traditional shopping is still thriving, online shopping can be an alternative for people wanting to save time and money. If a certain customer plan to go shopping, it could be stressful and also be time consuming. E-business has made shopping or any kind of transactions online much easier and convenient. It introduces new facilities, opportunities and way of shopping for both vendors and customers.
The Information revolution is changing our daily lives. With the rapid development of computers and the internet, online commerce has become quite common and plays an important role in the modern world. Online business has been booming in recent years. US online retail sales rose an average of 11% in the first three months of 2009 (“US Online Sales Up,” 2009). The growth of online sales may be due to the growing number of consumers who shop online.