College of Business Illinois State University
Illinois State University
Jump over the College navigation bar.

Dr. Gary Hunter

Best Buy Case Study

"Showrooming" vs "Webrooming"

The preceding introduction argues that Best Buy is being challenged by the practice of "showrooming."Quint et al. (2013) define the practice of showrooming as follows: "Many of us have “showroomed” at least once in our lives — visited a store and saw a product we liked, but then purchased it online instead of from the store." An excellent primer and recent summary of consumer trends related to this practice titled "Showrooming and the Rise of the Mobile-Assisted Shopper" was reported by Quint et al. (2013). Please see https://www4.gsb.columbia.edu/filemgr?file_id=7313935 for a copy of the report. IBM recently reported an extensive 2014 study of over 30,000 consumers in their Business Value Global Consumer Study that studied the determined the level of omni-channel adoption by asking consumers where they made their last purchase. They found that the store still rules but it is losing share precipitously. The percentage of respondents who last shopped in a physical store declined from 85 percent in 2012 to 72 percent in 2013. The real winner was the online channel, which saw its share of shoppers nearly double to 27 percent of shoppers versus 14 percent last year. The full study can be downloaded from http://www-935.ibm.com/services/us/gbs/thoughtleadership/greaterexpectations/.

However, an alternative position has emerged most recently in the business literature related to the practice of "webrooming." A 2013 study by Accenture found that 88 percent of consumers admit to ‘webrooming’ – browsing online and then buying in a store. Please click here for the associated new release; the full Accenture study can be found online at http://www.accenture.com/Microsites/retail-research/Pages/index.aspx. A reader-friendly online introduction to webrooming is also available online from Merchant Warehouse at http://merchantwarehouse.com/a-retailers-guide-to-webrooming. A recent news report from CNBC from February 2014 discusses this trend (see the video below; Source -- | NBR Staff, http://nbr.com/2014/08/07/back-to-school-retail-trend/). Also see http://www.cnbc.com/id/101390062#).

 

Modi (2015) recently reported some evidence related to showrooming and webrooming practices as of early January 2015 that students will find useful in this case analysis (see http://multichannelmerchant.com/must-reads/webrooming-mobile-showrooming-2015-19012015/). Also, a recent report identified those retail product categories that are most affected by showrooming by gender (see the figure below).

Showrooming


Best Buy's Perspective of Showrooming

This section presents Best Buy's view of the specific problem of "showrooming" from the perspective of the Vice President of CRM, as well as articulates Best Buy's strategic marketing response. Some readers may not be fully familiar with the concept of "showrooming." The following questions were posed to the Best Buy executive in October 2014.

1. Please describe the problem of showrooming from Best Buy's perspective. Why is this a marketing problem? Specifically, how does it affect the various measures of marketing success previously identified? In terms of the problems facing Best Buy, how highly would this one rate in your mind from a marketing perspective?

2. Best Buy recently initiated a series of TV ads aimed at changing consumer behaviors related to showrooming. (i) Can you describe the advertising strategy? (ii) Can you identify the marketing-related goals of the TV campaign? (iii) How would you assess its "success" to date? How are you measuring "success" of the TV campaign?


Student Problem:
  1. First, please describe Best Buy's "problem" as best you understand it from a marketing perspective. Please note that this calls for a description, not a formal argument.
  2. Second, please evaluate Best Buy's advertising campaign as a tactical initiative to combat showrooming consumer behaviors. This does require an argument. The conclusion should be either that Best Buy's advertising campaign was "good" or "bad" from a marketing perspective.
  3. Third, please build a formal critically thought out argument for how well you expect it to succeed in terms of marketing measures of success over the next 1-3 years. Please be sure to specifically discuss how the evidence that you have previously evaluated related to showrooming and webrooming impacts your evaluative analysis of Best Buy's strategic response. Also, please identify explicitly the strengths and weaknesses of Best Buy's general strategy to respond to this issue as best you understand it at this stage of the case. This is not your opinion, rather, a marketing-based evaluation of existing evidence and marketing theory.
  4. Finally, please build a strategic marketing response plan to the issue of showrooming to recommend to Best Buy executives (i.e., an abbreviated marketing strategic plan). Such an abbreviated plan would necessarily include at a minimum recommendations related to marketing research, measures of success, and various tactics to achieve the stated measures of success).
2017-06-13T15:03:23.481-05:00 2017