Best Buy Fails to See Amazon as Competition

best buyThis last week, along with traveling back to Salt Lake City from Boston, I was also able to celebrate my birthday for the 32nd time.  I decided, in celebration, I was finally going to bite the bullet and go out and purchase a Blue Ray DVD Player.  So I did my shopping, and found the best Blue Ray player for the price which I could find was an LG BD 370 Network Blu-ray Disc Player, which, at cheapest rate, sold on Amazon for $217.21.  It has BDLive, Netflix and Youtube streaming, along with all the other cool features you can get in a blue ray player.  Load times are also very fast.

While I was ready to purchase on Amazon and wait for my shipment, I decided to search around locally to see if I could find something I could pick up that day, since it was my birthday, after all.  I found one at around $229 on BestBuy.com, and sure enough, it was available at my local store.  I knew Best Buy offered price matching – they hang a huge banner from their store advertising such.  I also love that I can earn points from them, and since it’s my birthday month, I get quadruple the points for my purchases this month! I also had a $10 gift certificate I had earned from previous purchases.

So I headed over to my local Best Buy, eager to purchase my new player, found the player, picked it up, and even got a copy of Coraline
to watch with the family that night.  The DVD happens to play in 3D, 2D, normal DVD formats, and has a downloadable version you can save to a Mac, PC, or iPod/iPhone.  I took it and a Coke to drink that night over to the checkout counter, and to my surprise, the lady handling my purchase wouldn’t match the Amazon price I had printed out before coming to the store!

“We don’t match online prices,” she said.  I responded with “well, you do realize Amazon is a competitor, right?” She then responded with something to the effect that it was their policy.  She then proceeded to offer me an extended warranty plan, adding, “I bet they don’t offer that online, do they?” Despite the irony of that statement and the good laugh I got from it, I left it alone, purchasing the item at full-price since it was only a $10 difference, and while Best Buy seemingly couldn’t afford that difference, it wasn’t a huge deal for me, especially since I had the gift certificate.

That experience however has made me think twice about the next time I find something cheaper on Amazon, or elsewhere online.  Since I can’t price-match at my local store, why buy local at all?  All their competitors, CompUSA, Circuit City, etc. have gone fully online.  Who exactly is Best Buy price matching with any more?

I think in the future, when I see that lower price on Amazon.com, I may just take it, give Amazon the business, and have the order delivered to my door rather than wasting my gas to go to Best Buy.  Sorry Best Buy, but your competitors are much more appealing to me right now.

23 thoughts on “Best Buy Fails to See Amazon as Competition”

  2. Louis, I was already there, already spent my time and gas to get there, and
    it was only a $10 difference. I also had a $10 gift certificate. I was
    just amazed that they didn't see Amazon as competition, when, had I known
    they wouldn't price-match beforehand, I would have purchased it from Amazon
    in the first place.

    Like

    Reply

  3. I don't see how buying local means buying from Best Buy… To me, if you were buying local, it would be buying from TV Specialists, Performance Audio, or any other local shop, and not a mega chain…

    Like

    Reply

  4. Not to nitpick, but CompUSA and Circuit City haven't gone “fully online”. They're gone. The company that runs the Tiger Direct website just bought the rights to the names and logos to try to milk the existing brand-awareness, but other than that there's zero relationship to the originals.

    B&M retail stores rarely price match online offers because they have expenses to cover that online-only places don't, like rental for the store space and stock that needs to be spread out across all the stores taking up space rather than moving straight from a central warehouse to the consumer, that keeps their prices a little higher. Granted, that gives the online stores an advantage – b&m stores are banking on the immediate gratification factor to offset that.

    They recognize that the online retail space is a competitor in the broader sense, in the same way that ebay, craiglistlist, and even pawn shops are – you can get the same products, but with a different set of tradeoffs. But they're not considered “comparable” competitors because their business models are so different – selling at the same price will hurt the b&m store a lot more. At this point I suspect BB's main competitors from a price match perspective are places like Walmart, Target, Sam's Club, Costco, etc.

    Sure, as a consumer I find that irritating, and I'm certainly no fan of Best Buy, but if you want to continue to have the option of immediate local pickup you're just going to have to reconcile yourself to the idea of paying a bit more. There's no way a b&m store can optimize their distribution system to the point where it's realistically price-competitive with a moderately large online operation, without removing the immediacy that is their main differentiating feature. The only place that's big enough to come close is probably Walmart, but I wouldn't really want that as my only local option either…

    Like

    Reply

  6. Mike, interesting perspective. Regardless, that is why these B&M stores are
    going out of business. I know after this I'll be purchasing from Amazon or
    other online sources if they have the lower prices.

    Like

    Reply

  8. Granted. I too prefer to buy online because it's cheaper and I don't know if b&m can continue to function in a lot of retail spaces.

    I was just jumping in because as you said, you went to BB specifically so you could get it NOW, which is what those places are for. In your case you would prefer the lower price to the immediacy (although the preference can't be all that strong or you wouldn't have gone ahead and bought it for $10 more just because you were there 😉 ) but a lot of other folks seem to want it both ways without considering what they're asking for. It's a problem of unrealistic expectations.

    I'm not saying there aren't b&m stores out there with ridiculous markups, but generally the few dollars more you pay directly translates into some kind of additional value. For a place like BB it's the immediacy. For the smaller and even more specialized stores it's usually a bit more markup but in addition to the immediacy you generally get expert knowledge communicated face-to-face.

    That kind of value isn't for everyone. I think most people (you and I included) are more concerned about price than either of those things, which is why online is doing so much better. But I think a lot of people, especially heavy internet users, are so used to the online way of doing things that they start thinking things like “Amazon can do this price, so BB (or whoever) is just ripping me off” without considering the differing value propositions involved.

    I personally opt for “cheap and a bit later”, but in some situations “now” is important. And there's just no way to get “now” without paying for it. If your post is going to be out on the internet I figured it should be accompanied by that disclaimer.

    Like

    Reply

  10. I think the more interesting question is what's going to happen to that value proposition in the long term.

    I generally can wait for an online order to get to me, but when I can't (say my main hard drive fried or something) I want my replacement instantly. And sometimes (if rarely) I feel the need to pick something up and play with it before committing to buy. So having the option of local is important for a lot of items even though we may exercise it rarely.

    But if people don't hit that situation often enough for the b&m chains to sustain the distribution system that makes it possible, those chains fold and the option goes away. (That's what it felt like when CompUSA shut down.) And I may not need it much, but when I do I really need it.

    I'm not saying that's a reason to shop local or anything. But as you said, those types of chains are going out of business because stuff is cheaper online. And while that's a perfectly rational way for the market to act, the further it goes the more it restricts our choices (at least along this particular axis of value). So just observing – that would suck.

    Like

    Reply

  12. Oops…
    Retailers sometime have trouble seeing the forest for the trees…
    It is to bad that the sales clerk wasn't given the authority to say something beyond the “policy” statement and make to be given the authority to make a customer happy enough to tell their friends how they were treated.

    In this world of hyper connectivity, even sales clerks can start a negative chain reaction…
    And for just over ten bucks they purchased some space in social media…. They may want to rethink this investment…

    Like

    Reply

  15. I just went through this with a TV purchase. Same price, but BB had it here, and while I had to pay taxes, I could see it in the store and compare. Hard to do online for some things. Now Amazon dropped their price further and I'm looking at a $200+ difference if you include taxes. Am I frustrated? Sure. Am I going to take it back to BB after taking up an hour of their time or more? Probably not. Some products just don't work well for this type of game, in my opinion. Even something that has a lot of online reviews sometimes just needs to be seen in person to decide.

    Like

    Reply

  16. Although this blog post is almost a year old, I think it's a store to store basis on online competitors. The official policy is to not Price Match online stores (but they now consider Amazon to not be an online store). But when I went to Best Buy 2 months ago they price matched Walmart.com's price for me, so it may just be the stores own policy or the employee that handled the purchase.

    Like

    Reply

  18. I think it's more likely that Walmart.com isn't considered an “online store” because it's just an offshoot of their main b&m retail business. Even if Walmart.com's price doesn't match Walmart's walk-in price, if they didn't price match you they'd still be losing you to what is very much a direct competitor in the same retail space.

    Like

    Reply

  21. I think it's more likely that Walmart.com isn't considered an “online store” because it's just an offshoot of their main b&m retail business. Even if Walmart.com's price doesn't match Walmart's walk-in price, if they didn't price match you they'd still be losing you to what is very much a direct competitor in the same retail space.

    Like

    Reply

Leave a comment