By Amy Gilroy
Best Buy Co., Inc. (NYSE:BBY) officially launched its permanent price matching policy last week. Here’s a few details you may want to know.
First, Best Buy said it will only match prices to stores who are authorized to sell the product in question.
It is yet unclear what impact the price matching policy will have on the car audio industry. A leading supplier said he expects the impact to be minimal noting, “They are not going to match a price to someone selling out of his basement or bedroom.”
Two suppliers noted that many independent retailers already price match on a consistent basis in order to keep customers.
Here’s how the policy works on the sales floor:
A customer asks a Blue Shirt for help. Once he verifies the current price, that the product is in-stock and qualifies, he will make the price adjustment. Prices can be verified though a smartphone, a page printed off of the Internet or a print ad for a local retailer.
We asked Best Buy if it will sell product to retailers unauthorized to carry that product. A spokesman clarified it will price match against “a retail store authorized by a vendor to sell a new, factory-sealed product with a warranty and [that] is located in the same market area (within a 25 mile radius) of your local Best Buy store.”
For customers, “The best way to show proof of price is to bring in the competitor’s current ad. We may call the competitor’s retail store to verify the lower price and availability of the item,” said the spokesman.
Mobile phones are excluded from the price matching policy.
The price matching program follows a limited trial period late last year.
On Friday last week, Best Buy CEO Hubert Joly told analysts that the trial program had only a minimal impact on Best Buy’s margins because its prices are already competitive. He said the new permanent policy “may increase costs a little bit, but we are Best Buy and we are determined to be the ‘best buy’ for our customers.” He also said he liked the response to the program thus far from both Best Buy Blue Shirts (salesmen) and customers.
In addition to meeting local prices, Best Buy is matching prices against 19 online retailers: Amazon.com, Apple.com, Bhphotovideo.com, Buy.com, Crutchfield.com, Dell.com, Frys.com, hhgregg.com, HP.com, HomeDepot.com, Lowes.com, Newegg.com, OfficeDepot.com, OfficeMax.com, Sears.com, Staples.com, Target.com, TigerDirect.com, and Walmart.com.
Best Buy said the program will end “showrooming,” where a customer views products in a store but then seeks out a lower price elsewhere.
Amy Gilroy is the Editor of CEoutlook and a Contributing Author to Satellite Radio Playground and Market Playground. Amy has been a fan of car audio longer than she cares to admit. At age 17, she was told an amplifier could make the car radio sound better, and from then on, she was hooked. Prior to launching CEoutlook, she was a Senior Editor at TWICE magazine.
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