Structural capital price determination

Best Buy Plans To Use Permanent Price Matching To End Showrooming  January 12, 2018 – 07:44 am
Best Buy

Best Buy changes its policies in a last ditch effort to defend itself against the big bad Internet

Just about every tech savvy consumer is guilty of it, but few choose to admit it. We see a product online, we fall in love with the features and price, but for some inexplicable reason we simply must fondle it in person before buying. Best Buy has often dismissed the showrooming phenomenon when speaking to shareholders during earnings calls, however it’s hard to sugar coat the reality that Amazon can easily offer lower prices without the constant drag that a brick and mortar store has on the bottom line.

Of course showrooming isn’t the only factor fueling Amazon’s unprecedented rise, and Best Buys meteoric fall, but it’s certainly a factor. Today however, Best Buy announced its fighting back, and it’s doing so by making its holiday price matching policy permanent starting March 3rd. According to Best Buy Spokesman Matt Furman, “We are going to a low-price guarantee.” “There is no doubt that this new policy ends showrooming for Best Buy customers.”

In addition to price matching, Best Buy will also be reducing its return policy from 30 days to 15 days, and during the return window they will continue to offer a refund with no re-stocking fees. Aggressive price matching will almost certainly increase revenues among the “gotta have it now crowd”, however it remains to be seen if they can sustain a price war with online retailers who benefit from significantly lower cost structures.    

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