Best Buy joins 'showroom syndrome' fight
RICHFIELD, Minn., Oct. 13 (UPI) -- U.S. electronics chain Best Buy Co. said it will push back against a consumer trend known as showroom syndrome during the holiday shopping season.
Retailers, with Best Buy as a prime example, have been struggling to deal with the new shopper habit of looking over merchandise in brick-and-mortar stores, and then using mobile-friendly apps and browsers on smartphones to find cheaper prices and order items they viewed in-store from online retailers.
Best Buy said it would not only match prices with the likes of Amazon.com Inc., but it would offer free delivery for items not in stock, The Wall Street Journal reported Saturday.
The retailer said it needs to create more sales out of its in-store traffic. About 40 percent of the customers who walk through a Best Buy outlet make a purchase at the store, the retailer based in Richfield, Minn., said.
"We have a tremendous opportunity to increase that close rate," said company spokesman Mathew Furman, using the sales term that means to close on a deal.
Other retailers are putting together strategies to combat the shopper habit of using brick and mortar outlets for window shopping, and then going online to make the purchase.
Walmart Inc. is using some stores to try out same-day deliveries, hoping to appeal to impatient shoppers.
"Let's be the best showroom. Let's be best place where customers want to go and get the experience," said Walmart Chief Executive Officer Mike Duke this week at an investor conference.
Amazon says e-readers are loss leaders
SEATTLE, Oct. 13 (UPI) -- Amazon.com Inc. Chief Executive Officer Jeff Bezos said the giant U.S. online retailer did not make a dime with sales of its digital readers.
"We sell the hardware at our cost, so it is break-even on the hardware," said Bezos, referring to the Kindle Fire HD and Paperwhite devices.
The BBC said the company used the so-called digital readers as a springboard to sell books and other content.
"We want to make money when people use our devices, not when people buy our devices," the Los Angeles Times quoted Bezos as saying.
The admission that the two readers are what retailers call a loss-leader -- usually a must-have item that is sold at a loss or break-even price to lure customers into a store -- came as Amazon launched a book-lending service in Britain, Germany and France.
The service will run by subscription, which would give readers access to select titles in the Kindle Owners' Lending Library, the BBC said.
The strategy contrasts with that of Apple Computer, which has said it runs its iTunes store at just above break-even prices, while relying on revenue from the hardware to make a profit.
Santander breaks off deal with RBS
LONDON, Oct. 13 (UPI) -- The head of the Royal Bank of Scotland said it was "disappointing" that Spanish bank Santander pulled out of a deal to by 316 RBS branch offices.
The deal that would have meant the transfer of 1.8 million retail accounts broke down with Santander claiming an agreement had overshot its final deadline.
The British and Spanish banks had reached a tentative deal in August 2010, the British Broadcasting Corp. reported Saturday.
"It is of course disappointing that Santander decided to pull out of this transaction, especially for the customers and staff involved," said RBS Chief Executive Officer Stephen Hester.
He also said RBS would quickly begin the process of looking for another buyer.
The European Commission ordered RBS to divest itself of some of its assets after the British government granted it a taxpayer bailout of $58.3 billion.
Housing prices rise in Southern California
LOS ANGELES, Oct. 13 (UPI) -- The housing market turnaround in Southern California is pushing prices higher as the number of foreclosure sales has dropped, real estate analysts said.
Foreclosure sales have dropped to 16.4 percent of sales in Southern California in September, the lowest level in nearly five years, DataQuick reported this week.
The Los Angeles Times reported Saturday the median price for homes in the region is climbing as inventories of homes on the market have fallen.
The median price -- halfway between the lowest and highest prices of homes on the market -- hit $315,000 in September, a climb of 1.9 percent from August and 12.5 percent from September 2011.
"Right now, inventory is down 40 percent or 50 percent, depending on where you are in LA, so people are going crazy -- they can't find anything to buy," said Glenn Kelman chief executive officer at Redfin, a housing brokerage firm.
"The latest stats suggest unbelievably low mortgage rates and modestly higher consumer confidence continue to put pressure on a supply-starved housing market," said DataQuick President John Walsh.
"Assuming this year's modest upward trend in pricing holds, we'll eventually see the market begin to re-balance with more supply, though that could take many months," he told the Times.
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