Tuesday, July 3, 2012

Only a Supremely Self-Confident Company Would Post its Competitors' Current Prices in Store: Best Buy Might Do So

How many companies do you know that would be willing to post their competitor's prices, on the same merchandise, inside the store?

Best Buy might do so, suggesting that the company believes its prizes are close enough to Amazon that doing so will emphasize the value of shopping at Best Buy.

That points to an interesting perception problem Best Buy wants to overcome, namely that its prices "must be" higher than what is available online, and from online retailers such as Amazon.

That can lead to customer "showrooming," where consumers inspect merchandise at Best Buy and then purchase online.

That Best Buy might be willing to post current online prices indicates its belief that prices are competitive enough to allow it to do so.

Some observers already say Best Buy does offer prices that compare well or even better than the competition. Over the years, Best Buy has even considerably weakened Amazon’s sales tax advantage, the retail price advantage Amazon can offer in some states because it does not collect sales taxes.

Executive vice president Stephen Gillett, Best Buy’s new digital chief, recently told institutional investors the company might install screens throughout its stores that display real time prices on products offered by competitors like Wal-Mart and Amazon.

How many firms do you know of that would dare do such a thing?

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