Consumer Insights · Media Strategy · Brand Planning | Los Angeles, CA

Best Buy Trying to Embrace its Role as a Showroom

Best Buy

I still remember when Santa Fe, the small town I grew up in, got a Borders and a Best Buy, right around the same time in the late 90’s. It was like we were a real city. I would go on to spend way too much time and money in both places over the following few years till I left. After all, those were by far the best places to buy the electronics, books, CD’s and other stuff I was into at the time.

In some ways, the big box era was a pretty good time to be a consumer. It opened up a level of choice for a lot of products that simply didn’t exist in the retail landscape before. It also coincided nicely with the economic boom of the late 90’s. So consumers had ample home equity loan cash to stuff into our Ford Explorers to go buy DVD players and 4-in-1 inkjet printers and such.

But gone are the days, and now we’re all buried in debt of one sort or another, and trying to stuff our lives into a series of increasingly smaller spaces. But hey, at least the internet made retail better. From the everything-in-the-world comprehensiveness of Amazon (disclosure: they’re a client) to customized, curated solutions like Gilt Groupe, the web has done some good things for the shopper. It’s left the dinosaurs of the pre-9/11 world in a precarious position, though.

One of the most harmful forms of this in recent years has been the emergence of “showrooming,” looking at merchandise in a brick and mortar store with an eye to hunting up a better deal online. This behavior really took off with the advent of the smartphone. Suddenly, shoppers didn’t have to travel home to look up an item. They could search right in the store and make a purchasing decision. Whole apps exist to help them do this specific thing. Showrooming put the big boxes at a disadvantage.

With lower overhead costs like labor, real estate and inventory, online retailers were simply built to be cheaper. But they can’t offer everything, or we’d all skip the showroom step and go right to the iPad. In that spirit, Best Buy has brought in the big guns this holiday season, with spots featuring Maya Rudolph and Will Arnett. They claim to be the ULTIMATE HOLIDAY SHOWROOM.

I’d be lying if I said I loved the scripts in the spots, but the star power makes them at least tolerable. But what I’m most interested in is Best Buy, which has spent the last several years trying to fight the showrooming monster, flat out embracing it, at least in verbiage. To bolster their place as “the ultimate showroom,” they offer price matching to take away the disadvantage that’s been killing them (at least when you don’t take sales tax into account). They also subtly tout some of their natural advantages: service, recommendations from high school kids or whoever works at BB these days, ability to pick a gift up within hours of giving it. All that stuff matters to some degree to some people, but will it be significant enough to stave off the showroom bug this holiday season?

I’m betting no. At this point, online, and more specifically mobile, shopping is becoming more entrenched in the way consumers expect to shop, not less. And while the price match might be a help, ultimately it’s not a long-term strategy for a company with a giant retail footprint. They might be willing to sacrifice profit for revenue in the short term, but unless that somehow means they can get customers to come back and buy something else with higher margins later, that ultimately gets them nowhere. And the very nature of the showrooming shopper makes that unlikely. So Best Buy is headed the way of its old nemesis, Circuit City, right?

It’s certainly possible, but I don’t think its a foregone conclusion. What I do see happening is an evolution to serve more showrooming-proof customers. Old people, people who haven’t adopted advanced mobile shopping behaviors, people with no internet connectivity—these are not sexy segments for a tech retailer to target, but they’re still significant portions of the population. And they actually need what Best Buy has to sell: electronics and media in a retail environment they can access.

This might mean a reimagining of how they do business. For example, store locations would likely shift into communities with more of their target customers. Services focused on hand-holding the less tech-savvy through the purchase process, post-purchase troubleshooting, etc. would come to the forefront. In some ways, their Geek Squad brand is better positioned to do this than anyone. Multilingual service, signage, etc. would also become more and more important as foreign-born shoppers would likely constitute a bigger part of their customer base.

I’m sure some of those changes would be harder to implement than others, and a company that big doesn’t exactly turn on a dime. But at one point, Best Buy served a purpose. They’re where I got my first after-market car stereo, Playstation 2, and countless CD’s, video games, and all kinds of stuff that defined my youth. I don’t need to go to their store to buy the 2013 equivalents of those products, and if you’re reading this, you probably don’t either. But there are people who do, and they’re not people who need an ultimate showroom.

Photo: “Best Buy” by Ron Dauphin

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