SHOWROOMING AT BEST

BUY
GROUP E
Aleena Rose
Febin Charles
Gisele Johnson
Kenez Peter
Megha Anil
Sachin Harikumar
 Introduction
● Showrooming is the practice of examining merchandise in a traditional brick-and-mortar retail store or
other offline setting, and then buying it online, sometimes at a lower price.
● Electronic retailers are considered to be among the most vulnerable to showrooming, since the
majority of consumers still like to check out the look and feel of electronic products before making a
purchase commitment.
● A recent study from Omnico revealed that one in ten consumers have used their phone to purchase a
product from an online competitor while present in the actual store.
 Summary
● Best buy is the world’s largest electronics retailers with almost 2000 stores worldwide.
● Best Buy has been facing a challenging issue with their customers who visits their physical store just
to view and test certain products or in other words just to get the touch and feel factor of a product
before purchasing it online.
● Once when the customer knows what item and model they are looking for and the appearances and
features truly satisfy what they are expecting for, they go to the internet to shop for the best price and
have it delivered at their door step.
● Price matching apps for mobile phones created a price difference among the retailers transparent,
online and offline.
 Contd.
● Physical stores are the ones being badly affected by this. They are incurring huge losses due to less
generation of revenue and the additional operating costs they have to incur.
● The case examines if Best Buy can survive this battle with their online competitors especially with one
of their main competitor, Amazon despite having higher costs.
 Problem Statement

1. How would they compete in a world where the consumers could see the competing
prices?
2. Is matching the price with the online competitors sustainable?
 Alternatives
1. Developing an online website and app to keep up with the competition.

2. Strike a partnership deal with Amazon.

3. Shut down non-profitable stores in order to invest in e-commerce.

4. Offer attractive deals and discounts.

5. Providing more warranty when buying the products offline than when the purchase is made
online.

6. Price cutting to match its competitors. Specifically e-commerce platforms.

7. Diversifying the business into different product categories.

 Solutions Selected
1. Shutting down non - profitable stores in order to invest in e- commerce.
● Shut down the stores in the geographical areas where the business is really dull.
● Incurred a loss of $1.7 billion due to their physical stores.
● Redirect or investment of that amount for the development of an online app or website.

2. Providing more warranty when buying the products offline than when the purchase is made online.
● Can be purely used as a loyalty programme for existing customers and also to attract new
customers.
 Conclusion
● Throughout the case, it can be seen that Best Buy’s business got affected immensely due to online
sellers and they suffered huge losses.
● To tackle this online competition, they should develop their own e-commerce website and mobile
application.
● The suggestions recommended are Best Buy can provide their customers with extended warranties
,better deals on all their products and loyalty points.
● Also to convert their showrooming customers, they can work on their customer service.