Best Buy’s Price Match Problems Illustrate Merged Channel Hurdle
Written by Evan SchumanFebruary 19th, 2009
It was the Christmas holiday season in 2007 and Best Buy Associate Boris Manzheley was doing what he was trained to do. According to his sworn court deposition, that meant cheating customers out of price match deals. "Best Buy had a corporate undisclosed policy of discouraging and denying customers the benefits of its price match guarantee," Manzheley said in his deposition. "Management mandated that all price match requests that resulted in a product being sold at less than 5 percent above cost would be denied. Best Buy provided a financial incentive for denying proper price match requests." That incentive involved weekly bonuses, he wrote.
What seems like a bold and obvious strategy at headquarters becomes infinitely more complex in the field. And something as mundane as regional sales bonuses can set off a domino effect that can undermine—and potentially derail—the largest merged channel (and even cross-channel) efforts.
What seems like a bold and obvious strategy at headquarters becomes infinitely more complex in the field. And something as mundane as regional sales bonuses can set off a domino effect that can undermine—and potentially derail—the largest merged channel (and even cross-channel) efforts.
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8 Comments | Read Best Buy’s Price Match Problems Illustrate Merged Channel Hurdle
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Our Comment SPAM system is getting very aggressive these days and has been blocking legitimate comments. If you post a comment and don't see it appear within 2 hours or so, can you please send a heads-up to customer-service@storefrontbacktalk? Ideally, please include the time you posted the comment. That will allow us to try and hunt for it. Thanks! P.S. We're working on fixing the system, but we don't want to lose any valuable comments in the meantime.
-Ed
February 19th, 2009 at 8:10 am
It would be easy to say that Circuit City’s demise was even partly caused by its “unified pricing strategy”, but in fact, it was caused by a series of poor management decisions (anyone remember those $1100 Panasonic Plasma TV’s from 2006? The ones the company sold below cost? That decision started a sequence of unfortunate events), followed by an inventory re-valuation by its asset-based lender which rendered the company insolvent at the worst of all possible times – right before Christmas. In other words, the final demise was bank-driven.
It would also be nice to say that BB has a “merged channel strategy”. However, a confusing melange of “store only sales”, “web only sales” as advertised on the company’s web site are very hard to execute…and in-store employees look at customers blankly when asked about those “in-store only” specials.
Along with using technology to support the web, BB might be well served using technology to determine a pricing strategy, and then finding appropriate training and execution management tools to insure the company can actually execute on that strategy.
February 19th, 2009 at 8:16 am
Um, this is a surprise? It’s the retail way. Always has been, always will. Take a bunch of uneducated losers, pay them minimum wage, fail to train them, and what do you get?
February 23rd, 2009 at 8:14 pm
I’ve worked at a Best Buy store in the Midwest since October 2006. I can’t speak for what goes on in big city areas with perhaps tighter margins and more cutthroaat cometition, but no one in management or elsewhere at Best Buy has ever suggested NOT price matching; in fact, it’s always been encouraged. Before I began working there, I was constantly buying movies and DVD’s there which I price matched first with Wal-Mart, Target, etc., and never once had a problem getting the lowest advertised price- and I used my Reward Zone points towards getting even greater savings. If I didn’t bring the ad in with me, Customer Service called the competing store to verify the sale price.
That’s one of the reasons I took a job there- and, sorry, David, I’m an over 50 retiree and was hired at well over minimum wage.
Also, David, I don’t know of anyone there who was hired at less than $2.00 OVER minimum wage- and almost everyone is a college student.
From the article, it appears that the people in the “sworn court disposition” (What court? Where? In re what matter?) were in management, as floor employees don’t get to those training centers, etc. Again, the management people at the Best Buy where I’m working have never done anything EXCEPT encourage price matching in order to increase our sales and to be competitive in the marketplace.
February 23rd, 2009 at 9:43 pm
Editor’s Note:
Jim asked What court? Where? In re what matter?
State of New York, County of Kings
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
THOMAS JERMYN, on behalf of himself
and all others similarly situated,
Plaintiff, CLASS ACTION
COMPLAINT against BEST BUY STORES, L.P..
Docket No. 08 CV 00214
February 25th, 2009 at 10:55 pm
There have been various articles in my local papers and on the internet for years concerning Best Buy’s “anti-consumer” related business practices. They were even in trouble with the federal government not long ago for an issue. I hate to shop in places that take advantage of consumers/customers and I never have a good feeling about shopping there. I truly feel it’s a company without many scruples!
March 5th, 2009 at 9:48 pm
There has been something troubling to me for years about Best Buy. Unfortunately, tonight 03-05-2009 I just purchased an HP Laptop. Advertised for $699.99. Guess what, I had to pay an additional $59.99 for optimization and a few backup disks by the Geek Squad and they loaded the computer with their stuff. Nothing was posted or mentioned that this charge would apply. Manager told me to bring the disks back. Well, I will, but I have filed a complaint with the Attorney General’s Office State of Florida for unfair and deceptive trade practices. Consumer relations tried to justify the charge. No way. Even HP states you don’t need backup disks because there is a restore program on the computer. Just another way to cheat the public. I should have paid more attention because this is just on big PIMA.
March 19th, 2009 at 2:11 pm
Mary Jane I work with computers and my friends and family will ask me when they buy a computer from BB about this and I always tell them don’t spend money on something they can do themselves. The optimization is another thing for them to charge you extra. If they get an HP product, I always tell not to buy the extra warranty from them since you can get it for less from HP. The only perk you will be getting from BB is you can take it to their store for repair and they will give you a replacement for your battery if it dies.
April 1st, 2009 at 4:03 pm
This is not an ad for Best Buy but I just bought a TV from Best Buy, when I saw it advertised for $470.00 less a coulple a weeks later I went right and got a rebate for the amount. It was that easy. But I was sealing with what seemed to be “quality” people and not the minimum wagers.