As the Connecticut Attorney General's Office continues the probe into possible fraud accusations against the $31 billion retail chain, the retailer's executives concede errors.
As it tries to navigate the minefield that todays multichannel retail strategies have become, Best Buy officials are conceding that "human error" and employee "confusion" were the reasons customers were shown a site displaying higher brick-and-mortar prices while incorrectly being told that the displayed site was showing online prices.
The confusion stems from two visually identical sites that Best Buy employees can show customers. The sites have only a handful of minor functionality differences, with the key difference being that the prices are sometimes different, said Chap Achen, director of order management for Best Buy.
This issue has come to haunt the $31 billion retail chainwhich owns about 941 stores in the United States and Canadaafter the Connecticut Attorney Generals Office launched an investigation into the chain, trying to establish whether employees had deliberately conned customers with the almost-duplicate site.
Best Buy officials, while admitting "human error" among its workers, denies any evil intent and says the false statements apparently made by store employees were a result of confusion and inadequate employee training.
"This is more an issue of process than of deception," Achen said, defining it more specifically as employees "not realizing" the sites differences. "The differences between the two can be improved upon. Our customers and, in this case, an employee were confused about the differences between [the two sites]," he said. "The kiosk is reflecting store pricing. Were absolutely evaluating the option of making it more clear. We feel, if anything, this [Connecticut] investigation has exposed that we can take more concrete steps" to make the site differences more obvious.
The intrastore version is showcased in store kiosks using Internet Explorer and is intended to show customers information about products available in the store, along with their official prices. The problem stems from Best Buys price-matching policy, which promises to match the price of other retailers, and it explicitly includes BestBuy.com.
To read more about Connecticuts investigation into Best Buys intrastore Web site, click here.
The problematic scenario happened when customers saw a low Web price and went into a Best Buy physical location to trigger the price match and get that low price. Employees would agree to match the price and would say they are calling up the Web site to verify the claim. Instead of calling up the Web site, though, employees would access the intrastore version of the site, which looked identical (other than its pricing) to the site, and then used that to "prove" the online pricing didnt exist.
Achen said employees have access to both sites and shouldnt have shown the wrong site. He said he believed those instances were accidents, where employees truly believed they were showing the Web site.
Why do the two sites look identical? Achen and Dawn Bryant, who is Best Buys corporate public relations manager, said the mirror designs were solely the result of cheapness, not trickiness. The two siteswhich Achen said each contained "hundreds of thousands of pages" including "at least 250,000 active product pages"used the same design because at the time of its launch, no one saw a need for a different site design.
"Our online kiosk is a virtual copy of the Web site," Achen said, with just a handful of differences. The differences include the checkout on the kiosk does not require an e-mail address (it is required for the Web sites checkout); pop-up payment forms time out "a little faster" on the kiosk version to make it more difficult for another customer to read a credit card number; and the kiosk version can only view sites owned by Best Buy.
The Best Buy browsing restriction is to prevent customers from using these very publicly displayed kiosks to show pornographic sites or even visit price-comparison sites or the Web sites of competitors. "Weve got parameters about when were linking out to third parties," Achen said. "Were only going to link to stuff that we absolutely trust."
The original purpose of the kiosk was to show inventory and product details, and it stemmed from a time when Web access was not nearly as common as today.
Achen said Best Buys Web site uses extensive customization, meaning that one customer visiting the site and looking at a certain product might be presented with a lower "overall purchase price" than another customer looking at the identical product at the same time, based on that customers buying history and other factors. "Thats the power of personalization," Achen said. "Were trying to drive certain categories of business."
The kiosk was intended to offer various in-store-only incentivessuch as financing. This adds up, Achen said, to a very complex multichannel pricing situation where different Web prices will appear. Sites can also frequently change pricing based on inventory and supplier changes that feed into the system automatically. "On any given day, there are going to be variances in the price. A customer may be complaining when [a brick-and-mortar associate is] showing Web site pricing [instead of in-store pricing] because the Web pricing may be higher at that moment."
Achen said that employee training was "one component" of the problem. "People lose the context. [Store associates] may be going over to the kiosk once a day" and may not remember which site is which, he said.
Was Best Buy diabolical or doddering? Click here to read Evan Schumans column.
"There was obviously some employee error [on] the sales floor," Bryant said, "given the complexity where dot-com and brick-and-mortar come together."
How do those explanations play with the Connecticut officials who are investigating? State Attorney General Richard Blumenthal said the probe goes on.
"Best Buys explanationsapparently multiplying but still murkyseem to raise more questions than they answer," Blumenthal said in a written statement March 5. "We will seek full and complete answers that address the potential consumer rights issues raised by the apparent practice of advertising one price and charging another. All of the facts need to be known before we can conclude our investigation and reach conclusions as to whether violations of law have occurred. We will pursue our investigation vigorously."
Next Page: Customers speak out.
Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.