Can Best Buy survive by matching Amazon’s prices?

Bis Buy (NYSE: BBY ) has announced that it will match the prices of its main online competitor, Amazon.com (NASDAQ: AMZN ) during this holiday season. The strategy appears to be working, but Best Buy has yet to work out all the details. According to The Wall Street Journal , the price comparison program may exclude some products. Depending on the nature of these products, this decision could hamper the company’s efforts.

For high-priced items, like Apple (NASDAQ: AAPL ) and Sony 60-inch laptops (NYSE: END ), Best Buy may not care that consumers go elsewhere to save a few bucks. For smaller items, however, it could help Best Buy maintain sales it would have lost to competitor dot-com.

Browsing through Best Buy’s DVD selection, shoppers will generally find that the first week sales (which are applied when a movie or TV series is released for the first time) are at or above Amazon’s. . After initial sales end, Amazon’s prices are usually lower than Best Buy’s.

While Amazon shoppers can purchase the first season of Happy Endings for $ 11.21 , Best buy sells it for $ 16.99 . Glee: The Complete Third Season Goes For $ 37.20 on Amazon; Best Buy Fee $ 39.99 .

Older items are even more expensive at Best Buy. Retailer invoices $ 34.99 for Rizzoli & Isles: The Complete First Season. On Amazon, it is sold for $ 25.00 .

Some of these discounts are due to the large network of retailers who sell their products through Amazon. Still, Best Buy still has to compete. The program will be less likely to be successful if Best Buy chooses to only match listings for products that are actually shipped and sold by Amazon. It doesn’t matter whether consumers choose Amazon or an Amazon merchant. Either way, Best Buy lost a potential sale.

While the program is fast (consumers shouldn’t have to wait long for a Best Buy employee to verify the validity of an Amazon price) and efficient (most products on Amazon should apply, regardless of the seller ), Best Buy might be able to stop showrooming without scare customers .

This program could go even further and encourage positive showrooming behavior by encouraging consumers to compare prices and buy items on the spot. The goal here is to prevent shoppers from leaving the store and buying elsewhere. But it could also encourage people to visit Best Buy more often because they know they can always get the best price available.

Follow me @LouisBedigianBZ

(c) 2012 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.




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