Daily Dose of iQ: Excuse me, what? Best Buy to Embrace Showrooming?

Apr 26, 2012 — Allan Pulga

OK, OK, so for weeks now, the bloodthirsty business media have been reporting on Best Buy's woes (marked recently by the resignation of CEO Brian Dunn), and our blog has been no exception.

The commonly accused drain on Best Buy's business has been "showrooming," a phenomenon by which online retailers (Amazon especially) capitalize on physical stores and mobile price-check apps to poach sales in real-time.

Leave it to Tom Webb of the Twin Cities' Pioneer Press (Best Buy is based in the Minneapolis area) to find a silver lining on the showrooming story, yesterday.

Webb reports that Best Buy is taking a "can't beat 'em, join 'em" approach to showrooming. "Best Buy could embrace being a showroom," he wrote. "That means welcoming price-checking shoppers into the store to play with the latest electronic gadgets, then helping them buy online, even from another seller."

Sounds shocking, but the company’s Chief Marketing Officer, Barry Judge, says they should be “the best showroom they can."

Webb explains how it can actually work as a business model:

  • Money from merchandising and product placement. Judge says Best Buy actually makes more money from manufacturers, paying to put their products on the floor, than it does from consumers.
  • The role of mobile apps in showrooming. "(The erosion of Best Buy’s business by showrooming) is not going to change or get any better," said retail analyst Bill Emerson. "It's not like these (price-checking) apps are going to disappear."
  • The in-person (see and touch the product) shopping experience. Webb also got a comment from 2011 iQmetrix Summit Keynote Doug Stephens:

"(Stephens notes that manufacturers) need places where customers can touch and explore their products, and there aren't many national electronics chains left," he wrote.

"Let's face it, Best Buy still sells an incredible amount of electronic equipment," Stephens said. "Manufacturers should be coming to the table, as well. Let's say you're buying a TV, what's the experience....Is that really the best TV-buying experience I can have in the market? That's the conversation Best Buy should be having, not how many stores they should be closing."

Topics: Retail Operations, Wireless Trends, Mobile Industry, Customer Experience, e-Commerce

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