Back in August, Best Buy had to cut almost 2,500 jobs in order to save costs. This happened on top of the company shrinking to a smaller footprint as well as bringing in Verizon to try and save the company from an inevitable collapse. Online shopping from places like Amazon and CompUSA have put pressure on Best Buy and its associates (who were selling shoes the day before they started working there) to step up and deliver better service to justify its much higher prices, but they have failed at doing so. Because of this, Best Buy will now try a different approach at battling Amazon and will quite literally stoop down to the site's level.
During this holiday season, Best Buy has announced it will match prices that Amazon is advertising in order to keep business in-house. To take it a step further, any product that is out of stock at the physical Best Buy locations will get free delivery to the customer's house. We can also be honest here and say that Best Buy knows a lot of people come into the store to try out the products and then buy them online for sometimes $300 cheaper. This is going to be the company's attempt at keeping the customer in the store to buy, however they may end up losing more money than they gain if they don't get the quantity of sales to justify the new campaign.
It is interesting to note that Best Buy VP of consumer insights, Bill Hoffman, said that the concept of looking and then buying elsewhere, at least for Best Buy, is "material" and the company should "pay attention to it" but said that the number of times that it happens in his stores are "still very low." Perhaps he does not have enough insight about his consumers, because it probably happens hundreds of times a day at my local store alone.
At any rate, this holiday season will be an interesting one for Best Buy, as they are one of the few national chains left still selling out of ridiculously oversized stores. It doesn't help that they have sales associates who know less about the product than the parents of the guy holding a spot for them in the iPhone 5 line. We'll see if this tactic is enough to get them through the holiday season and withstand the next year, but as we've been saying for a while now, it doesn't look good for that big yellow price tag.