Best Buy plans to end showrooming as consumers know it.
The Richfield, Minn.-based electronics retailer is joining Target in making its online price-match policy effective year-round, instead of just during the holidays. It's an attempt by major retailers to convince consumers that they can find prices in stores that are as low as online.
"Best Buy had to stop the hemorrhaging from Amazon and Walmart and solve the price issue in consumers' minds," said Dan de Grandpre, CEO at Dealnews.com, a deal-tracking website. "They have to be seen as price competitive with online."
Best Buy declined to say how many price matches it did during the holiday season, but most experts estimate that fewer than 5 percent of customers ask for a price match.
Still, knowing that it's available is important for consumers, said Dave Brennan, a University of St. Thomas marketing professor. "It's more about perception than reality, but it's a strong goodwill gesture."
And consumers do profit by asking. According to a survey by William Blair & Co. in Chicago, Best Buy's prices are about 16 percent higher than Amazon's.
The new policy, which goes into effect March 3, will replace the existing, temporary policy initiated for the holiday season. The company will match 19 online retailers such as Amazon, Target, Wal-Mart and Frys.
Unlike the original price match during the holidays, the new policy covers nearly everything in the store, including accessories, said Jeff Shelman, a Best Buy spokesman.
That's welcome news to Jon McLaughlin of Minnetonka, Minn., who was a showroomer until Best Buy started price-matching online competitors. He used to go into retailers to scout the merchandise and then go online to buy it for less.
But last month, when the 29-year-old was showrooming a Logitech universal remote for about $200, a Best Buy salesman offered to check prices online after McLaughlin mentioned shopping around. He found it for $25 less than McLaughlin had.
That sold him on the policy. "I still pay sales tax that I wouldn't have to pay at Amazon, but I can hold the item in my hands, and I'm supporting the local business," he said.
An absence of sales tax and free shipping can still give online retailers an advantage. But Brennan said Best Buy's positioning itself as a worthy online competitor now could become a significant advantage as more states start collecting sales tax on mail order and online purchases via the Marketplace Fairness Act, a pending federal bill. "It's going to happen, and when it does, it will level the playing field even more," said Brennan.
Besides price matching, Best Buy also has been proactively cutting prices. "We've seen a significant uptick in the number of high-quality deals from Best Buy," de Grandpre said.
Recent Best Buy bargains cited by Dealnews included Blu-ray movies for $10 with a $5 gift card, a 22-inch LED Hewlett-Packard Elite computer monitor for $100, and a 50-inch Toshiba LED 1080p flat screen for $450.
Some analysts are concerned that the goodwill created by Best Buy's price matching is somewhat negated by a new, tighter return policy. The company will shorten its return policy from 30 to 15 days to sync it to the price match.
"We wanted to eliminate the need for a customer to return an item only to rebuy it at a lower sale price," Shelman said.
While the return period may be shorter than the retail average, Best Buy does not charge restocking fees on opened items as some retailers do. Shelman thinks the 15-day period (longer for Reward Zone silver customers) will not inconvenience very many shoppers since the overwhelming number already make returns within 15 days.
Still, Brennan is concerned that a higher number of Best Buy customers use its return policy than its price match. "Not everyone tests a product within 15 days, but this policy will probably teach them to," he said.