June 27, 2012
In today's edition, Consumer Goods Editor & Analyst Austin Smith looks at the one number Best Buy (NYSE: BBY ) should be terrified of. In a recent Comscore study 63% of people who purchased consumer electronics online said they only did so after showrooming, or going into a bricks-and-mortar store to select the item first. When asked why, 72% of people said it was because of lower prices. Consumer electronics is the category most commonly under pressure from showrooming, and the trend only appears to be picking up steam.
While this may seem like a topic that's already been covered so much, it's difficult to overstate the threat to Best Buy and other electronics retailers, here. Their business model of high-margin up-sells simply can't survive in a world with price transparency and convenient online purchases.
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