Best Buy Versus Wal-Mart: To Buy or Not to Buy

When I read this Wall Street Journal article about Best Buy’s recent efforts to differentiate itself in its battle with Wal-Mart, it caught my attention, mostly because I’ve been shopping for a television this past week. An economic downturn can lead to some great deals on pricey electronics if you can fit it into your budget. Seeing that Circuit City is out of business, Best Buy and Wal-Mart have become my de facto choices.

But the WSJ article highlighted by shopping experience perfectly: save an extra $100 bucks by purchasing the television from Wal-Mart or go with Best Buy, whose customer service, and thus potential warranties and service, are far superior?

I’ve written about competing on price differentiation in the past, and I like to think that I haven’t become so cheap that I value attributes such as service, loyalty programs, quality, etc., when I’m making a substantial purchase.

But the truth is that in today’s economy, price wars are bound to happen, and the television I buy next weekend I’ll probably find cheaper someplace else within a few days. So the question it, what sort of service is worth that extra $100 bucks?

For Best Buy, they think it’s a lot, and that’s exactly what they’re betting the bank on moving forward. They’re planning on winning customers because they do a better job of helping customers navigate an increasingly complicated technology market. Based on my experiences this weekend in both stores, I’d have to agree with that.