Warc Blog

Best Buy 'kills showrooming'

5 November 2013
NEW YORK: US retailer Best Buy has "killed showrooming" with strategies ranging from price matching to improved customer service, its chief executive has claimed.

Hubert Joly made the comment in the context of analysts' remarks a year ago to the effect that showrooming, the practice of checking out products in store before buying them cheaper online, often from Amazon, would terminate Best Buy.

The extent of the turnaround was evident, noted the Wall Street Journal, in the fact that the retailer's advertising in the run-up to the Thanksgiving holiday period billed its stores as "the ultimate holiday showroom".

"If people don't feel they are being ripped off on price, they are more likely to buy from a physical retailer," said John Tomlinson, head of retail at ITG Investment Research. He added that with Amazon now having to collect sales tax on purchases in many states, retailers like Best Buy were better able to compete on price.

Other big-box stores are also claiming some success in tackling the trend. Wal-Mart has talked of "reverse showrooming", where shoppers explore products online before buying them in stores. And Target has installed wifi at its stores to encourage customers to browse products on their phones.

But bricks-and-mortar retailers are in no position to relax, as Amazon has demonstrated with its move into original TV programming. The online retailer has developed shows featuring top talent such as John Goodman that are available exclusively to subscribers to Amazon Prime.

The rationale is that Amazon is then well-placed to generate extra revenue, beyond streaming video, as analysts estimate that Amazon Prime members spend three times as much as non-members.

Amazon founder and chief executive Jeff Bezos told the Seattle Times, it was all about how Prime members could be made happy. "If we can make great television for them, that's going to be an element of that," he said. "And they pay us an annual fee for that."

Data sourced from Wall Street Journal, Seattle Times; additional content by Warc staff

 
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