Showrooming at BestBuy Harvard Case Solution & Analysis

Situational Analysis:

The stores are being flooded with visitors in the holiday shopping season. The traffic in the retail stores is significantly high in numbers, compared to previous years. The visitors in the retail stores have got their hands on the latest and the most updated gadgets that have been release recently. The owners of the stores are predicting this year’s holiday season to be one of the finest as their stores are crowded with people tapping screens of the gadgets, latest games and apps etc.

At the end of the day, cash counters told an opposite story when reviewed. In comparison to the traffic that flooded the retail stores, the counters had collected nothing. The counters and the cash registers of these giant retail stores told a sobering story to the retailers of the market. This happened with most of the retailer in the market of providing products to the consumers through different means.

Best Buy is the world’s largest retailer of electronic items. Despite the size and large operations of the organization, these trends were also the same for the organization as they fared even lower than its competitors. The trends of sales made in the season were on a declining trend for all the competitors that exist in the market. Specifically for Best Buy, the sales it has made this year are 4% lower than the sales it had made in the same season previous year.

These happenings call for changes in the strategies of these retailers in order to sustain their organizational competency. The traditional retailers are responding to these changes and transformations in the consumers’ buying behavior by introducing “doorbuster” techniques that focus on providing the customers with adequate discounted prices and low priced offerings. Traditional retailers like Amazon, eBay and other online retailers opted for developing their own mobile apps for the customers to easily compare and check the internet for the best deals that are available for a specific product.

The development of such apps that provide the customers an opportunity to look for the best deal available has changed the dynamics of the industry of retailing. The buyers have now started using the physical retail stores as showrooms for checking out the operational efficiency of a product and then looking for the best deals available for the desired product over the internet. The shoppers have starting using the brick-and-mortar retail stores for confirming the quality, and for getting their hands on the product, then finishing their purchases by finding out a better discounted deal over the internet and acquiring the product from them.

The price difference has become more transparent for the buyers in the markets. The buyers can now easily compare the prices of the product over the internet and easily find better and discounted offerings that are available elsewhere. In the holiday season of 2012, 27% of the mobile users used their mobile phone apps for comparing the prices of the gadgets and products available in the brick-and-mortar with the available offers over the internet. Now the buyers do not need to make any efforts to get information regarding the price differences. The price differences are approachable by the buyers as the level of price transparency has immensely increased due to development of such applications for the mobile phones.

The retailers now are countering to this dynamic change in the market. Clothing retailers like Macy’s have designed a system that will include the usage of mobile phone and tablets in completing their purchasing process. The buyers are capable of paying for their purchased items through their mobile phones and tablets in-store by Macy’s. Large brick-and-mortar retailers like Target and Wal-Mart have opted for fighting the changing trend by adapting to the new dynamics of the market. They have developed their own mobile phone apps that will enable the buyers to find out the best deals available in the retail store. These apps are aimed to reach the shoppers with coupons and discounted prices. Same strategy is applied by Old Navy, JC Penney and Crate & Barrel.Moreover, they also have opted to provide their own apps for increasing their reach to the buyers and their apps are developed by third party companies, un-like Target and Wal-Mart.

While all the retailers are trying to maintain their revenue levels, sales margins through adapting to strategies that are predicted to help them in efficiently adapting to the changing dimensions of the retailing industry, Best Buy is planning to reach the shoppers by permanently matching their prices with the online competitors, as high level of motivation for the purchase behavior of the customers are prices of the products. This method will be requiring the organization to match the prices with its competitors, operating through brick-and-mortar or through online retailing............................

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