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New Low Price Guarantee will match prices at local stores and 19 e-retailers.
Best Buy Inc. has set out to close the door on the practice of showrooming by offering to match prices set by all local retailers as well as 19 major online retail competitors. The electronics chain will implement its new Low Price Guarantee March 3 in all product categories and the majority of in-stock products, the company says.
Best Buy, No. 11 in the 2012 Internet Retailer Top 500, says its price-match policy signals the end of showrooming, when a shopper goes to a store to test out merchandise and then searches the web—often from a mobile device while in the store—for a better deal and ultimately buys the item online.
The new pricing policy announcement comes at a critical time for Best Buy as the web continues to grow and stores close.Among bricks-and-mortar competitors, Best Buy has an 18% market share in its categories, CEO Hubert Joly told analysts last fall, but among e-retailers, Best Buy’s share is only 7%. The company also lost two key marketing executives last year.
Under terms of its new initiative, Best Buy will, at the time of purchase, “match the current pre-tax price for new, identical, immediately available products from a local retail competitor’s store,” and a list of major online competitors: Amazon.com, Apple.com, Bhphotovideo.com, Buy.com, Crutchfield.com, Dell.com, Frys.com, hhgregg.com, HP.com, HomeDepot.com, Lowes.com, Newegg.com, OfficeDepot.com, OfficeMax.com, Sears.com, Staples.com, Target.com, TigerDirect.com and Walmart.com.
Best Buy tested price-matching during the holiday season. From mid-October through Dec. 24 it offered to match prices at local stores and items from certain e-retailers, such as Amazon.com, Apple.com, Crutchfield.com, Sears.com and Target.com.
Best Buy also will match prices between its stores and BestBuy.com, as it did during the holiday season test.
Price-matching will help, but Best Buy need to do more to remain competitive, says Paula Rosenblum, an analyst at RSR Research LLC, a retail industry consulting firm. “Deciding to price-match and publicly stating it is a good thing,” she says. “However, price matching in and of itself has never saved a retailer from extinction.”
Price-matching won’t end showrooming in any case, Rosenblum says. “Why would it? Consumers will still verify prices when they are spending thousands of dollars.” But Best Buy also is tying in its new strategy with customer service, which could make a difference going forward, she says. “Best Buy is upping its game, adding personnel back into the store and setting its sights on better service. If the company succeeds it will be because it has remained competitive on price but excels at service.”
Best Buy is limiting the low-price strategy to only one item in a group of like items, and doesn’t apply it to a range of products and conditions including contract-based mobile phone devices, other web retailers not listed, marketplaces, post-purchase price match requests or the pre-holiday period from Thanksgiving Day through the Monday after Thanksgiving.