Title: Best Buy- case study
1(No Transcript)
2Best Buy Loses Customers Due to Online-Only
Competitors
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3Your Local Showroom
- Best Buy has been facing a difficult issue with
customers visiting their stores to view and test
certain products. This is not beneficial to the
store, because once the customer knows what item
and model they want to purchase, they go
elsewhere, specifically on the internet, to shop
the best price and have it shipped to their door
(Team, 2012). The following slide shows how
businesses are being affected by this current
situation.
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4Direct Effects on BusinessWe Know Love
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5Who is Being Effected
- Because Best Buy was losing sales as a result of
Showrooming, the shareholders of the publically
traded company were incurring losses. In
addition, communities were losing tax revenue
when their local Best Buys would have to shut
down. These stores are often housed in large
properties, so vacant buildings can decrease the
real estate value of neighborhood as well.
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6Who Else is Being Effected
- There is also the human side of failing
businesses. People are at risk of losing their
jobs and, in turn, their livelihoods when a
company is not being productive. - The personal touch is lost in an online only
model. Some families, and especially senior
citizens, do not have easy access to
online-buying, which makes the loss of a
brick-and-mortar store a real disadvantage.
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7Price Matching to HelpRetain Customers
- Best Buy has decided to extend their Holiday
Season event of price-matching to be a permanent
occurance. This is believed to keep customers
coming to their store and to help ensure they
make their purchases on site. - Theyve also formed relationships with Apple and
Samsung to create a new store-within-a-store
model.
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8Its an Online World, Keep Upwith the Technology
- Best Buy has had many complaints about its
website in the past. One thing they can do to
help boost sales is something they have already
discussed doing, enhancing their website and
making it more user friendly. The article states
that Best Buy plans to invest 750 million on
different areas of improvement, website being one
of them.
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9Promising Future
- The recent changes that Best Buy is implementing
are causing some to call them the next Home
Depot, a retailer that also recently improved
their situation by making changes to their
business model. The rosier outlook has been
reflected in their stock price
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10potential solution(s) to resolve the issue
- In the last few years, Best Buy has been used as
a perfect example of a businesses that is heavily
affected by online retailers. The main challenge
for Best Buy has been more competitive online
sellers and the problem of show rooming within
its stores. Below are some ways to deal with this
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11Tackling problem of online stores
- The best way to combat the problem of online
competition is by setting up an ecommerce website
to put itself at par with the competition. The
company has already considered this among its
budgeted upgrade projects.
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12Solution to show Rooming
- The company has become less profitable as
customers only come to the stores to look at the
product features and price then buy the product
online at lower prices. - The best way for the company to deal with it by
making sure that the company converts show
rooming customers. The company can do this by
improving its customer service. - In addition, the company should expand its
product mix from selling large electronics like
the Television to other products with a lower
warranty margins to ensure that its profitability
increases(Team, 2012).
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13References
- Gara, A. (2013 , April 8). Best Buy May Be the
Next Home Depot (Update 2). Retrieved from Yahoo
Finance http//finance.yahoo.com/news/best-buy-ma
y-next-home-134700769.html - Team, T. (2012, November 11). Best Buy's
Earnings Still Facing Showrooming And Product
Mix Challenges. Retrieved from Forbes
http//www.forbes.com/sites/greatspeculations/2012
/11/19/best-buys-earnings-still-facing-showrooming
-and-product-mix-challenges/ - WINGFIELD, B. N. (2013,, FEBRUARY 27). More
Retailers at Risk of Amazon Showrooming.
Retrieved from New York Times http//bits.blogs.n
ytimes.com/2013/02/27/more-retailers-at-risk-of-am
azon-showrooming/?refbestbuycompany
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