Best Buy Case Study

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

S -

W

O

T

World's 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

Macy's - 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"