retail news in context, analysis with attitude

by Kevin Coupe

Electronics retailer Best Buy said on Friday that it plans to match the prices offered by online competitors - including Amazon.com - and will offer free delivery of items that are out of stock in its bricks-and-mortar units but available at BestBuy.com.

The Wall Street Journal notes that this position would seem to be at odds with the stated opinion of its CEO, Hubert Joly, who has said that he believes that reports about the impact of online retailers and so-called "showrooming," in which people go to physical stores to check out products and then buy them online for less, is overstated.

According to the story, "Best Buy's seemingly contradictory stance underscores the conundrum facing executives at many big-box chains. Aware that they need to adapt aging business models to the realities of mobile- and computer-aided shopping, they don't want to overreact or lose sight of what made them successful - that is, selection and service."

Well, at least this is better than the Toys R Us policy, which the company says is to match prices offered by bricks-and-mortar stores but not those of online competition - a policy, it seems to me, that falls into the category of wishful thinking.

The Journal points out that different retailers have different takes on "showrooming."

Walmart CEO Mike Duke says, ""Let's be the best showroom ... Let's be best place where customers want to go and get the experience."

"Toys R Us Chief Executive Gerald Storch," the Journal writes, "adamantly denies that the toy chain has suffered due to showrooming, even as he has ramped up the number of private-label products by 30% since 2006, partly to discourage comparison shopping."

And then there is the Best Buy approach - deny that showrooming is taking place to any great extent, but match prices with everybody as a way of being competitive.

The position here is not that bricks-and-mortar retailing is in danger of being made obsolete by online competitors. I think that in the end, it will be the retailers that offer consumers a variety of compelling options that will have the best chance of surviving ... and if they only offer physical shopping or online shopping, their offering has to grab the shopper in some sort of fundamental way.

My feeling has always been that showrooming becomes an issue for retailers when the most interesting thing for a shopper to look at in any store happens to be their smartphone screen. (Mike Duke has this absolutely right ... not that he needs me to tell his this.) More and more, the shopping experiences that work are the ones that are focused and differentiated, whether they are physical or virtual.
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