That Is the Question
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“Like other retailers including Target, Best Buys sales are adversely affected by the rise of show rooming where customers go to a brick and mortar store to see a product and eventually buy from online retailers like Amazon and eBay (Forbes, 2012).” But with the advent of smartphones and the expansion of online retailers like Amazon.com, show rooming has gone from being a headache for bricks and mortar retailers to a full-blown migraine. Amazon continues to promote a mobile app that allows consumers to scan barcodes in physical stores and find the (usually cheaper) Amazon price for that item immediately by using the Kindle. Now you are able to bring the other store in with you. And that raises the level of competition.
In an effort to conquer the challenges with its online business “Best Buy hired Stephen Gillett, the former Starbucks CIO, who played a key role in revamping Starbucks online operations. He is in-charge of Best Buys digital business, including its online stores (Forbes, 2012).” As the competition intensifies, Best Buy has replaced the standard barcodes on some products with different, chain-specific barcodes that make it impossible for consumers to scan those codes and find a quick online price comparison.
“Retailers are trying to distinguish themselves from each other through better customer service, product assortments and advanced technology. Likewise, Best Buy is presently rebuilding its internal IT team and has plans to hire approximately 200 IT professionals to provide a boost to its e-commerce sales (Forbes, 2012).” Best Buy is now overhauling some of its locations, for example, to make them more service-oriented, including a Solution Central help desk along the lines of Apples Genius Bar. They want a better understanding of the customer in the store, have a relationship with them and provide services that come with the product.
Retail chains are also moving to more closely link bricks and mortar stores with their online operations. The goal is to let consumers buy products using their preferred method, while at the same time taking advantage of the immediacy of a retail store. Walmart, Macys, Best Buy and the Container Store are among the chains that are expanding the use of in-store pick-up or returns of online orders, and even experimenting with drive-through services for online purchases at their physical locations.