BEST BUY

Group 03
Bhavya Jain- PGP09145
Esha Soni- PGP09153
Praveen Dhusia- PGP09166
Rumi Hajong-PGP09169
Sameer Garg- PGP09170
Seema Behera- PGP09173
 The practice of visiting a shop or shops in order to
SHOWROOMING examine a product before buying it online at a
lower price.
DESPITE THE MODEST INCREASE
IN STORE TRAFFIC , THE SALES
DECREASED

BEST BUY- THE WORLD’S

LARGEST ELECTRONIC RETAILER

SALES AT STORES DROPPED BY

OVER 4%
 The Issue – How E-commerce Is Affecting Retailers

• Online retailers designed the mobile apps to give shoppers an easy

way to search online for the product at best deals. This way there are
no customers for the retail shops.
• Even if the customer visit the retail shop, it is only for personally
trying out the product they’ve checked online and not for buying
them.
• Thus the retail shop traffic is more, but the sales was in a sobering
situation.
• It became difficult for traditional retailers to compete in a world
where shoppers could easily see competing prices, offers and also
when they could have a free home delivery.
 Amazon

E Bay

Other online retailers opted to release mobile phone

COMPETITORS apps designed to give shoppers an easy way to search
online for best deals

Online sales rising by 42% between 2008 and 2012

They prefer visiting stores check out new product and

then go home to spend time on deals online
Affected & Effected
AFFECTED EFFECTED

Online retailers has created transparency Amazon was one of the companies which was
between retail pricing. Customer visited the most successful in pulling the customers away
stores visited the stores just to view and test from the traditional stores.
products.

The unemployment was increasing at a higher By the end of 2011 more shoppers began
rate as people saved more and spent less in their search on amazon rather than searching
stores. in google.

The shareholders were incurring heavy loss After the success of its retail website, they
and their profits were going down. launched apps for comparison, mobile app
The target sales was getting flat with no and a simpler app called flow.
increase in revenue.
AMAZON

Amazon was one of the Promotional deal of 15

most successful % discount to anyone
Shopping app for mobile
company in pulling who used the app to
phones
customers away from buy online in a physical
traditional stores retail store

End of 2011, 30% of

Prime membership fee shoppers began the
Flow app
of just 79$ search on Amazon Vs
just 13% with Google
 Red laser

OTHER PRICE
COMPARISON Loopt

APPS

Shopkick
 Last quarter of 2011, same store sales fell by over 5%

Instore bar codes- The company tailored its in-store barcodes to block customers
attempting to showroom using mobile apps.

Product only available at Best buy- It offered products only available at Best Buy, such as
exclusive editions of Blu-ray movies
BEST BUY
RESPONSE Partnered with 3rd party apps like shopkick- The company then created its own shopping
app. It also partnered with the third party apps in an attempt to win mobile savvy
customers back to its own brand

Permanent price matching- The company took the extreme decision of always matching
lower prices that shoppers found elsewhere

Low price guarantee- It started it’s full blown marketing campaign starring a host of
celebrities appropriately called your “Ultimate Holiday Showroom” with 11 different
commercials. https://www.youtube.com/watch?v=SEuVAgwlNhE
 PPM Policy
• They should retain the PPM policy.
• It means you're constantly on the lookout for the best pricing
strategy to appeal to your target audience. One such strategy is price
matching. This is when one retailer agrees to match a
lower price from a competitor, typically if the shopper presents
evidence of the better price
• Because when other retail shops remove their discounts and deals
after the festival season and Best Buy keeps the discount price, the
people who are willing to buy in the retail shops would obviously
prefer Best Buy.
 Strategies That Can Be Opted By Best Buy
• Educate your customers about why your products are worth buying.
• Create a membership program. And turn customers into members
and give them benefits at the end of the year.
• Stock different merchandise. If a shopper can get exactly the same
merchandise online at a lower price, it's easy to comparison shop. So
look for items that are unique or special in some way.
THANK YOU