>>Target could have gone away, but they didn't. They bolted on an e-commerce platform and then they used their physical store to add groceries and return -- make returns really much easier than Amazon.
I know this is off-topic, but the easiest return I ever made was an amazon return. I went through the return process on amazon's website and was given a QR code which took a few mins. I drove to the nearest Kohls, walked to the amazon kiosk, showed the QR code to the employee, and handed over the return. Took all of 30 seconds in store.
Anyway, back on topic. A hybrid model makes sense for Ford to compete, and it is a lot like Best Buy/Target in many respects. However dealers have made a living for a long time being the middle-men, I wonder how they will deal with additional competition.
Best buy has a problem where people look at the product at the store then end up buying online, I could see people taking test drives and then ordering from the Ford website. Although I think the dealer will arrange commission if that happens.
Re: bestbuy “showrooming” issues, I think they actually figured out how to make it a value driver for them, whereas it killed others. It’s a great place to look at products, and they price match so you can walk out the door with the product instead of waiting.
> ... and they price match so you can walk out the door with the product instead of waiting.
I would love to see the behind-the-scenes numbers crunched on that model. I don't see how that model works long-term unless the percentage of customers in the showroom walking out the door with online price-matched goods is a relatively small group, or they're successful up- and cross-selling on gonzo margin goods and services before and after they walk out the door, or their COGS is way better, or some other activity to make up their bigger overheads versus an e-commerce marketplace.
Can anyone offer any insight how BestBuy is long-term sustainable with the online price matching policy?
I've known people who work at Best Buy and they get their products substantially cheaper, just as the online retailers do. There is some level of bake in for storing it at the store... but not really much different from sitting in an amazon warehouse for instance, most best buys have large warehouses in the back you'd never be aware of. Many people aren't aware of the price matching nor take advantage of it, they also sometimes will "confirm" the price match, so you can't really fake them out. And you end up browsing whilst they do the price match + grab the product from the back.
Long term sustainable simply because they've already baked it in and it's less widely known amongst the typical consumer and its honestly kind of a hassle, people pay for convenience.
Best Butt is basically a group of warehouses across the country - order from them online and you may find your order shipped from random Beat Buy stores.
And for many of their products they all sell at MSRP anyway (apple laptops say) so they’re already matching Amazon et Al. And things like hdmi cables are some off brand and so they don’t price match anyway.
They have a pretty slick setup going, also jumped in on the appliances market just as Sears et Al disappeared.
There is there real value. When you need it now they are just across town. You have to be very rural to not have one within half an hour. Amazon has 2 hour delivery in large cities, but only some cities (though granted the exceptions are small population).
I think it's more that Amazon's prices have come up on the type of stuff that's sold in stores where they aren't the price leader anymore, if they ever were.
I've bought more from Best Buy in the past few years than I have in the decade before because they are often the cheapest option, including Amazon. They also offer same-day courier service on some things I've ordered.
Another thing to consider beyond raw COGS is "attach rate": online price matching gets you in the door and buying the big ticket items, but once you are in the door how likely are you to also pick up accessories (especially if you are saving on the base item) or even unrelated things that you saw in the store while you were there?
I know this is off-topic, but the easiest return I ever made was an amazon return. I went through the return process on amazon's website and was given a QR code which took a few mins. I drove to the nearest Kohls, walked to the amazon kiosk, showed the QR code to the employee, and handed over the return. Took all of 30 seconds in store.
Anyway, back on topic. A hybrid model makes sense for Ford to compete, and it is a lot like Best Buy/Target in many respects. However dealers have made a living for a long time being the middle-men, I wonder how they will deal with additional competition. Best buy has a problem where people look at the product at the store then end up buying online, I could see people taking test drives and then ordering from the Ford website. Although I think the dealer will arrange commission if that happens.