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News Analysis
Why Amazon Is Killing Best Buy
By Swanni

Washington, D.C. (May 31, 2013) - Best Buy CEO Hubert Joly told an industry conference this week that 92 percent of the retailer's sales are done at retail.

“We said that showrooming actually starts on the Web, and we have to do much better from that standpoint, which is then a key driver of traffic to the stores,” he said, according to Home Media Magazine.

Joly referred to "showrooming," the industry term used to describe a shopper who examines a product at one vendor's site or store, but decides to buy it at another because it's less expensive at the second one. Best Buy has said repeatedly that it wants to stop showrooming, or at least, give consumers less cause to do it.

According to a survey done this morning by TVPredictions.com, Joly has his work cut out for him. Of today's 10 best-selling TVs at Amazon that are also in stock at BestBuy.com, none were cheaper at Best Buy. (See:
Amazon's top-selling TVs)

Not a single one. (Although one set did have the same price at both sites.)

From Samsung 32-inch sets to Vizio 32-inch TVs to Samsung 60-inch sets, the Amazon price was better every time.



But that's only half the story. The price difference was often just a dollar or two. (In only one case was the difference more. Amazon was selling a Samsung 32-inch LED TV for $40 less than BestBuy.com.) Clearly, knowing that Best Buy is its top competitor, Amazon shaved the Best Buy price by $1-5 to ensure that a comparison shopper would see that it was offering a lower price than Best Buy.

While $1-5 is not much, the fact that Amazon always has a lower price eventually will have an impact on prospective buyers. They will come to conclude that Amazon's TVs are cheaper than Best Buy, even if it's just by a few dollars.

Home Media Magazine writes that Best Buy's online business increased 16 percent over the last year, although its online market share is still a meager seven percent.
 

"There is no reason why it should be lower (than others),” Joly said.

No, Mr. Joly, perhaps there is a reason.

Also See:
Top 100 Digital Media Players

Top 100 Blu-Ray Players

Today's 10 Best-Selling Blu-ray Titles

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