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Best Buy Co., Inc. (NYSE:BBY): How Showrooming Can Save the Chain

November 20th, 2012

Best Buy Co., Inc. (NYSE:BBY) reported quarterly earnings that were worse even than critics had expected. The world’s largest electronics chain earned four cents a share compared to estimates of twelve cents. More concerning still, Best Buy said free cash flow would be as much as 30% lower than expectations. The numbers call into question yet again whether or not Best Buy has a place in a world of e-commerce stores and low-price televisions. The answer depends on whether or not the chain can learn how to embrace what they are and stop complaining about what they aren’t.

Specifically, Best Buy needs to stop complaining about things like Showrooming. Defined as customers coming into stores to “kick the tires” on products prior to buying online, showrooming has been fingered as one of the key reasons Best Buy won’t make it. The reality is just the opposite.

Best Buy CEO Hubert Joly has said the chain is going to start embracing showrooming as a chance to sell to a captive audience. Retail expert Hitha Prabhakar says Best Buy should embrace the move more aggressively using their installed customer base. “There are 40 million people in Best Buy’s loyalty customer program,” she notes in the attached “Breakout” clip. “Why are they not focusing on those customers?”

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  1. thinking
    November 21st, 2012 at 16:27 | #1

    Match online price and you are there best buy..

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