Best Buy Case Study
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Best Buy is a consumer electronics retailer with nearly 2,000 stores worldwide. In 2012, the rising popularity of price-matching apps for mobile phones made price differences between retailers transparent, online and offline. Shoppers desire to test electronics first-hand before purchase drove them to use Best Buy stores as “showrooms” to see new products and then search for better deals on their smartphones. This case examines how brick-and-mortar stores battle showrooming through changes in product assortment, the development of apps, loyalty programs and changes in pricing policy. The case asks whether Best Buy can survive by permanently price-matching their online-only competitors, primarily Amazon, despite having higher costs.
5C Framework
Company Best Buy
Worlds largest electronics retailer
Fall in sales, loss during holiday season
Declining share of retail
Stagnant share of internet retail
Customers
Access to see competing prices and offers
Competition
Amazon – Online shopping and price comparison app, prime membership
Macys – integration of mobile devices to make in-store purchases
Target and Walmart – own shopping apps with coupons and discounts
Old Navy, J.C. Penney, Crate & Barrel – shopping apps designed by 3rd party
Collaborators
Shopkick and other similar apps
Context
Online Shopping and price comparison apps
pricing policy changes – MAP
Decision Problem
Alternatives
Framework used to evaluatee alternatives
Evaluation
Recommended Action
Best Buy is a consumer electronics retailer with nearly 2,000 stores worldwide. In 2012, the rising popularity of price-matching apps for mobile phones made price differences between retailers transparent, online and offline. Shoppers desire to test electronics first-hand before purchase drove them to use Best Buy stores as “showrooms”