For years, Best Buy has relied on using occasional sales and discounts to lure customers into its stores. But a senior executive at the electronics retailer says it is now looking at moving toward a Walmart-like model of lower everyday prices in order to stay competitive.
As we reported during the last holiday shopping season, the prevalence of smartphones and the instant access to price comparisons they provide is creating a new group of consumers who do their comparison shopping on the fly.
“We have to move rapidly in recognizing the transparency of pricing,” said Best Buy’s executive vice president and co-head of the North America division to Bloomberg News. He added that the company has begun talking with Sony, Samsung and others about offering greater flexibility on pricing their products.
Another senior VP at Best Buy says the company’s reliance on sales has just trained consumers to wait for the next round of discounts before they shop.
“If the pricing isn’t everyday, the consumers just wait,” he explained. “Our inventory sits and waits for that next promotional moment.”
But some industry analysts worry that, since Best Buy doesn’t have the daily foot traffic of a Walmart, it would have a hard time staying afloat with lower overall prices.
“Wal-Mart makes up for everyday low pricing in volume,” he says. “Best Buy doesn’t have the traffic, so it doesn’t make sense for them. They’re losing better-informed customers who are more savvy about alternative places to buy the same product.”