read the case study carefully and answer the following questions:

1. Should Benjy's keep its price-matching policy or abandon it in favor of another approach?
2. What do you see as Benjy's options for defending itself against showrooming? What are the pros and cons?
3. What do you think of Stanley Farber's ideas for going on the offensive?
4. If you were in Bestice Jenson's shoes, what would you do next?
5. What is the impact that technology has had on the retail sector by drastically changing consumer behavior.

For the exclusive use of K. Alfayez, 2023. EXPERIENCE FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG A brick-and-mortar retailer searches for a response to "showrooming." by Thales S. Teixeira and Sunil Gupta that what you do has consequences. This real-live shopping experience you're having here at Benjy's is helping you decide which TV to buy. And if you order from Amazon, you're basically cheating us." She knew she sounded shrill. The couple looked as if they expected her next words to be "I'll get you, my pretties, and your little dog too! Caught in the Middle Bertice wasn't accustomed to playing the Wicked Witch. Although she prided herself on her financial toughness, she was a natural mediator. Her even temper and evenhandedness had helped her succeed in her mostly male undergrad finance and MBA programs and then at a top-tier accounting firm, where she had become the sole African American partner. Bertice would soon be mediating among the board members of Benjy's as they discussed what she had just seen in Oklahoma: "showrooming." Customers like the couple with the dog weren't unusual. More and more people were coming to Benjy's to look at products but then buying them from online competitors whose lack of a brick-and-mortar presence enabled them to offer discount prices. Research showed that 83% of people shopping for electronics and appliances were now practicing showroom ing. The chain's sales had nose-dived as a result; the most recent quarterly knew that something had to be done, but they didn't agree on what. Ben favored a two-pronged approach that was already under way in a few stores make showrooming as difficult as possible for customers, but if they did it, in keeping with the company's COPYRIGHT E 2015 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. This document is authorized for use only by Khalid Alfayez in 2023. September 2015 Harvard Business Review 2 For the exclusive use of K. Alfayez, 2023. FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG the same-sell only the highest-value products and educate customers about them, instead of letting them get overwhelmed in an uncurated retail landscape?" "You're naive, Farb," Ben said. "People will still showroom if they find better deals online." "We could still match prices," the CEO said. "How could we afford that?" Bertice asked, keen to break up the back-and-forth between the two men. "I'm glad you asked," Farb said. He paged ahead to a different slide. "You'll see we've done some modeling. Of course, fewer and smaller stores would cost less to staff and maintain. But I'd like us to think more creatively too. Before I was in hospitality, I worked for a supermarket chain. Do you know how those companies make money while cutting prices? By capitalizing on their position as sales platforms. They charge their suppliers fees for promotions and access to prime shelf space. Everyone thinks Amazon is allpowerful, but look behind the curtain and you'll find vulnerabilities. For one thing, it's a pretty poor marketing platform. Benjy's is a great marketing platform. If we curate the best and let customers experience the products, why shouldn't suppliers support us?" "There's no precedent for that in electronics retail," Ben countered. "It's a nonstarter. You'll ruin relationships that we've spent decades building. And you're talking about huge business-model changes that, even if we wanted to make them, would take months-maybe years!-to implement. We need a solution now!" Several board members nodded in agreement. Bertice could sense the tension building between Farb and her father. "Farb, you're proposing a pretty radical change, and it's a lot for us to digest," she said quickly. "Dad, it would also be useful to have more detail on those countermeasures you mentioned. So let's table this discussion for now and get through the other items on our agenda. Farb can send around his deck, with plenty of supporting data, and we can all take some time to review the information. If everyone is amenable, I'd like to arrange a conference call next week to discuss only this and decide on a course of action." New Ways to Make Money The next day, Bertice was in Huntsville, Alabama, to join in the ribbon cutting for a redevelopment project. Several big-box superstores-including a Benjy's-had been closed and replaced by a mixed-use residential-retail community. Benjy's still had a presence there, but a much smaller one. "Welcome to Benjy's," a store employee said when Bertice walked in. "Did you come here today looking for something specific?" That was a nice touch-probably Farb's doing. He was no doubt piloting his ideas about more helpful and attentive employees here in this smaller-store format. The previous evening she had gone over his and her father's proposals, analyzing the business cases. Ben's plan seemed a short-term but low-cost and potentially effective solution. Farb's was more costly and risky but possibly much better in the long run. Instead of responding to the young woman's question, Bertice explained that she was in corporate management at Benjy's. Then she asked about the showrooming phenomenon. The woman's cheery expression faded. "Oh, yeah. That's a big problem. We've changed the displays to make showrooming harder. And we've tried matching online prices, but people say they don't want to go through the hassle. Seems they just want to hear our spiel, try out the products, and go online. And often not to the Benjy's site." That was extremely discouraging. "What spiel?" Bertice asked. "Lately we've gotten a lot of training, so we can tell you everything you ever wanted to know about the sound system in the Sony Bravia TV, for instance. We're full of information. People tap into that, get educatedand then go buy from Amazon." "But I can't imagine everyone does the showrooming thing," Bertice said. "Don't some of your customers really appreciate your knowledge and purchase from us as a result?" The employee laughed nervously. "Honestly? I think service scares people-especially people who are longtime Benjy's customers," she said. "Scares them?" Bertice asked. "They assume good service equals higher prices. It's not true, but I've seen people turn around and walk out when we try to engage them." So customers weren't responding to price matching, and they were being chased away by excellent service. All this put her in mind of Oz again. This time she didn't feel like the Wicked Witch; she felt like Dorothy, thrown into an unfamiliar world. But no ruby slippers were going to help her get back to the old predictability of retail. She would have to figure out herself how to move forward. Reprint Case only R1509x This document is authorized for use only by Khalid Alfayez in 2023. September 2015 Harvard Business Review 4 For the exclusive use of K. Alfayez, 2023 Case Study Teaching Notes traditional low-cost, high-volume ethos. The CEO wanted to pursue a different strategy: He thought Benjy's should set itself apart from the competition by emphasizing a curated product mix, knowledgeable employees, and follow-up services. After her visit to Oklahoma, Bertice flew to Atlanta, where the company had its headquarters, for a regular board meeting. The first item on the agenda was how to address showrooming, and she jumped right in: "This is a serious problem for most retailers, but particularly those of us in electronics. Amazon keeps making it easier for shoppers to search for, find, and order a product online. We need to decide on a counterstrategy." Farb, as everyone called the CEO, had prepared a presentation. But the projector was balky, and Ben took advantage of the pause to share his own views. "It's obvious that we need to play both offense and defense. Offense should include providing more-aggressive discounts through the Benjy's app and matching online prices. We also need to get more suppliers to impose minimum advertised prices on their online retailers so that there's a price floor for every product, online or off. "As for defense, it will be a process. Some of the basic tactics, such as altering our bar codes, are now moot, because the newest price-comparison apps incorporate object-recognition software. That means shoppers don't even have to upload bar codes. All they have to do is point a smartphone at a product." There was murmuring around the table. Apparently this was news to some of the directors. "But there are ways to thwart object-recognition software," Ben continued. "We've begun creating display structures within the stores that confuse the apps while still showing Sunil Gupta and Thales S. Teixeira teach cases about showrooming in their digital strategy and executive education classes. Here Gupta shares some thoughts. WHAT DREW YOU TO THIS STORY? I teach a case on Amazon and showrooming, but I realized we should cover the topic from the perspective of the brick-and-mortar retailer too. If technology is disrupting your business, what should you do? WHAT SUGGESTIONS DO STUDENTS MAKE? Match prices, use anti-showrooming tactics, improve customer service, ask manufacturers to create exclusive SKUs, focus on installation and repairs, emphasize instant gratification. But there are problems with those approaches; this case highlights a few. WHAT LESSONS DO YOU HOPE TO TEACH? When the market changes, companies must reconsider how they create and capture value. Would consumers miss Best Buy if it disappeared? Yes, because many like to see and touch products. Would manufacturers miss it? Those that don't have stores would. So Best Buy is creating value. How do you capture it? Ask the manufacturers to pay a fee for showcasing. off the products. There are consultants that specialize in this. The costs are relatively minor and well worth it. I think this tactic is a no-brainer." Farb caught Bertice's eye and signaled that the projector was now working. Realizing that she'd allowed her father to dominate the conversation, she turned the floor over to the CEO. "As you all know," Farb said, "I spent my early career in the hospitality industry, and one of the reasons you hired me five years ago was to improve our customer service. That starts with respecting our guests and how they like to shop." "The way they shop is killing us," Ben interjected. Farb hesitated but continued: "We have to acknowledge that the world has changed. Showrooming is a fact of modern life, and if shoppers sense that we're trying to stop them from doing it, they won't even walk through our doors. So with all due respect, I think we should scrap the defense and focus on a stronger offense. We need to be looking at what more we can do for our customersprovide better service, knowledgeable salespeople, exclusive products, and after-purchase support." Ben broke in: "But now you're talking premium. Customers don't want that from us. Our priority is the biggest range of products at the lowest prices. That's the Benjy's promise. How can we make money by increasing our cost structure?" "Maybe it's time to change our promise," Farb said. He paged quickly through the deck until he got to a slide titled "The New Benjy's. Bertice was slightly miffed; Farb hadn't warned her about this. But as ever, she kept her expression neutral. "I'll skip over some of the lead-in, but here's a short report I had my team prepare," Farb said. "As I see it, we can't beat Amazon on range, and when we try to match prices that are, on average, 8% lower than ours, we're in the red on most sales. But what if we shifted away from big-box retail to a more boutique experience? Fewer and smaller stores with fewer but better-motivated and better-trained employees-the baristas of electronics retail." Ben sputtered: "We're not running cafs, Farb!" Bertice spoke up: "Let's hear him out, Dad." Farb gave her a grateful look. "TVs and laptops may seem like commodities that people will buy only at the lowest prices, but so did coffee before Howard Schultz made Starbucks a destination. Why shouldn't Benjy's do 3 Harvard Business Review September 2015 This document is authorized for use only by Khalid Alfayez in 2023