Best Buy

E-commerce is quickly gaining traction as a quick and affordable entree to China's vast retail market, with U.S. brands Costco and Macy's both reportedly planning big new moves into the space. Their strategy reflects an emerging trend that has big Western chains circumventing the traditional retailing route into China, seeking to avoid the big costs and risks that have led to big losses and retreats for names like Best Buy and Home Depot. But the online strategy also carries its own risks.  

Samsung has thrown down another gauntlet in its battle with Apple. This time, the Korean electronics giant is going head-to-head with Apple stores by opening retail boutiques, called "Samsung Experience Shops," in 1,400 Best Buy locations by the beginning of June. Stores will start operating in all of Best Buy's big-box stores by May 1 and at smaller stores by June 1, around the same time as the Galaxy S4′s release date in the second quarter of this year.

Mobile technology has empowered consumers to expect to have the information they need, and to consummate the transactions they want, whenever and wherever they are. This ability to have instantaneous access to product information and pricing can be of tremendous benefit to consumers and retailers alike, but in the form of "showrooming" it's become many retailers’ worst nightmare.

In the largest showrooming study to date, Placed identified Best Buy and Target as high-risk retailers for Amazon.com customers to view offline and buy online. Surprisingly, Best Buy and Target weren't the most at risk for showroomers taking over their aisles. The results from the Placed: Aisle to Amazon Study found that consumers who showroom and then purchase on Amazon are 20 percent more likely to visit Best Buy and 15 percent more likely to visit Target than average, but Bed Bath & Beyond, PetSmart and Toys"R"Us all face greater risk.

Make no mistake, showrooming is crushing brick-and-mortar, increasingly pushing in-store sales online, where they're almost always inevitably cheaper. With online retail spend growing 16 percent last year, and retailers like Best Buy and Target recently creating Amazon.com price-matching policies, there's no denying the trend.

Best Buy has quickly revived email support due to customer demand after the electronics retailer pulled an email contact from its website in December. Happy Customer first reported on Dec. 11 that an email contact form had disappeared from the customer service page and the company was placing a higher priority on live chat to communicate with customers. Best Buy told Happy Customer at the time that the decision was based on a survey of online shoppers and that email is "unable to offer the same level of in-the-moment assistance."

Best Buy's price-matching guarantee backfired last month when it lost about $65,000 in one day after Wal-Mart advertised discounts on Apple's flagship iPhone 5 — and it was all my fault. The fact that Best Buy lost money based on Wal-Mart's promotion was exposed after it and several other retailers filed complaints against Wal-Mart for false advertising tactics with about a dozen state attorneys general, according to The Wall Street Journal. 

Wal-Mart's recent price comparison advertisements may be enticing consumers, but the promotions are also angering competitors. Toys"R"Us and Best Buy, two retailers targeted in the Wal-Mart ads, are taking action by making complaints to attorneys general in several states against the discount retailer. Wal-Mart Spokesperson Steve Restivo confirmed the retailer was contacted by Michigan, Illinois, Missouri and Pennsylvania regarding its rivals’ complaints, but no legal action has been taken by any of the states or the retailers beyond letters and the conversations that were exchanged.

Best Buy has eliminated the email contact form on its customer service page, saying it's instead pouring more resources into live chat. The option to email the company from the customer service page was pulled last week. The company told Happy Customer that email is "unable to offer the same level of in-the-moment assistance." The decision was also influenced by customer feedback, as 20 percent of respondents to a survey of Best Buy's online shoppers said they prefer live chat.

No one who's read the business press this year is surprised by this prediction, but it bears repeating: what we're watching here is the slow-motion retail trainwreck that is the demise of once-mighty tech giant Best Buy. In this case, a combination of the "Amazoning" of the consumer retail (particularly electronic) experience, a steady decline in shopping experience and quality, and a dependence on brick-and-mortar over a cohesively evolving web strategy (as well as limited product advantage) has brought Best Buy to its retail knees.