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Show Rooming at Best BuyHarvard Business School
Thales TeixeiraElizabth Anne Watkins
Group 5 | Master of International Marketing | Pricing Strategy | Prof Mike Berry
Background….……………………………….….2min
Show Rooming……………………………...…..2min
Key Pricing Decisions…………………....……2min
Recommendations……………………….…….4min
Questions……………………………….……….5 min
Background
Online Retail USACAGR 08-15: 17%
Background
2004 2012
Technological Devices
Online Shopping
“The everything Store”
Penetration Price Strategy 1) Lower operation costs 2) Product Cost Negotiation 3) No sales tax (USA)
Price Comparison Apps Price Transparency
On lineAdd complexityto purchase decision
Problem Situation
StimulusZeroMOT
FirstMOT
Awareness Discovery Purchase
In Store In StoreMedia
2004
2012
StimulusZeroMOT
FirstMOT
Awareness Discovery Purchase
Media In Store On line
ShowRooming
High Fixed Costs
Penetration PriceCompetitors
Sales LossTransfer Profits
Price War - Permanent price match online retailers.
Use Price-match strategy during the seasons.
Avoid Price War – Block bar codes to price comparison apps.
Key Price DecisionsKey Price Decisions
Until2011
Early2012
Nov2012
Price War - Permanent price match online retailers.
Key Price Decisions
PROS
Fairness
Recover Sales Breakeven Risk
Key Price Decisions
Tripled Stock Price Reactive
CONS
Willingness to pay, not value
Strategic Pricing
Proactive
Value-based
Profit-Driven
Success in pricing requires master the art of diplomacy, not the art of war.
Price Match reduce show rooming, but it does not overcome it.
Moving Forward
StimulusZeroMOT
FirstMOT
Awareness Discovery Purchase
Key Success Factor: Complete Understanding of Consumer Journey
Media In Store On line
ShowRooming
Media Online In Store
ReverseShowRooming
SecondMOT
UltimateMOT
Experience Recommendations
Recommendations
StimulusZeroMOT
FirstMOT
Awareness Discovery Purchase
Media In Store On line
Media Online In Store
SecondMOT
UltimateMOT
Experience Recommendations
Taking Advantage
of Show Rooming
Capitalizing in Reverse
Show Rooming
Target Collaboration
with the industry
Partnership Brick and Click
Recommendations
You CAN showroom, but you MUST share
Mobile Platform linked with social media where users can share their technological aspirations, ask for friend`s advices, they also can build the living room of the dreams .
Recommendations
StimulusZeroMOT
FirstMOT
Awareness Discovery Purchase
Media In Store On line
SecondMOT
UltimateMOT
Experience Recommendations
Taking Advantage
of Show Rooming
Mobile Strategy
Sales TeamImpulse purchase
Visitor’s Profile• Not ready to buy just browsing.• Don`t have information.• They will not get a
basket when they get in the store.
E-Commerce
Recommendations
Media Online In Store
Capitalizing in Reverse
Show Rooming
StimulusZeroMOT
FirstMOT
Awareness Discovery Purchase
SecondMOT
UltimateMOT
Experience Recommendations
Online Portal Sales Team Social MediaExcellence in Post Sales
ServicesFidelity Program
Visitor’s Profile• Informed clients.• Ready to Buy.
RecommendationsZeroMOT
Discovery
In Store
Target Collaboration
with the industry
Vantages for the Industry:
Price Consistence;
Product Exposition;
In Store
FirstMOT
Purchase
Transfer Price
Standard Promotional
Calendar
Controlling inventory in the Online Channel
Experiencein Store
Recommendations
Partnership Brick and
Click
FirstMOT
Purchase
On Store
Amazon inventoryIn Best Buy
Purchase Amazon Inventory
In Best Buy
Cut Amazon delivery
Costs
Best BuyStores would
offer products in better prices than On line
Cost Savings are translated in better
margins to Amazon and a discount in final price
Questions
StimulusZeroMOT
FirstMOT
Awareness Discovery Purchase
Media In Store On line
Media Online In Store
SecondMOT
UltimateMOT
Experience Recommendations
Taking Advantage
of Show Rooming
Capitalizing in Reverse
Show Rooming
Target Collaboration
with the industry
Partnership Brick and Click
THANK YOU
Group 5 | Master of International Marketing | Pricing Strategy | Prof Mike Berry
References
Holden, Reed K, and Mark R Burton. Pricing With Confidence. Hoboken, NJ: Wiley, 2008.
Price Waterhouse Coopers, (2015). [online] Available at:https://www.pwc.com/es_CL/cl/publicaciones/assets/retailing2015.pdf[Accessed 6 May 2015].
Anon, (2015). [online] Available at: http://uk.businessinsider.com/reverse-showrooming-bricks-and-mortar-retailers-fight-back-2-2014-2 http://www.wsj.com/articles/wake-up-brick-and-mortar-retailers-1416874241 [Accessed 6 May 2015].
Anon, (2015). [online] Available at: http://retailindustry.about.com/od/statisticsresearch/p/retailindustry.htm https://www.youtube.com/watch?v=Y8nX_mKnQg0 [Accessed 6 May 2015].
Key Price DecisionsReferences