Best Buy ready for battle with Amazon on pricing
The retailer will reportedly match all Amazon prices this holiday season, and also offer free home delivery when products are out of stock.
Best Buy, hit hard by cheaper online prices, has decided to take the fight to Amazon.
During the holiday shopping season, Best Buy will match Amazon's prices in its stores to keep pace with its chief competitor, the Wall Street Journal is reporting today, citing a source. In addition, the retailer will offer free home delivery on products that are out-of-stock at its brick-and-mortar stores.
The move is a thinly veiled attempt on Best Buy's part to head off so-called "showrooming," which sees consumers come into the company's stores to check out products without buying. Once they find something they like, they order the product online for a cheaper price.
In an interview with the Journal, Best Buy vice president of consumer insights, Bill Hoffman, said that showrooming is "material" and the company should "pay attention to it," but he argued that the instances of that happening are "still very low."
Still, it's hard to debate Best Buy's slumping financials. The company posted revenue of $10.5 billion during the fiscal quarter ended August 4, down nearly $1 billion from the $11.3 billion in revenue it generated during the same period last year. Best Buy only posted a $12 million profit, down from the $177 million it netted last year. Meanwhile, same-store sales were down, further casting doubt on Best Buy's performance.
The issue is so bad that Best Buy founder Richard Schulze is trying to take control of the company in an acquisition bid. However, Schulze, who has said that he wants to take Best Buy private and address its issues, has so far not secured financing for the multibillion dollar deal.
Best Buy is not the only company feeling pressure from online firms. Earlier this week, Wal-Mart announced that it too was taking the fight to companies like Amazon by testing a same-day delivery service. Dubbed Wal-Mart To Go, the initiative will allow customers to order certain items and gifts, and then have them delivered to their homes and offices that day.
"It's part of our long-term vision to winning commerce," said a Wal-Mart representative. "We can do that by building deeper relationships with customers."
CNET has contacted Best Buy for comment on the Journal's report. We will update this story when we have more information.