Tuesday, Best Buy announced its third quarter earnings report and while noting $10.75 billion in revenue, those numbers are down $500 million from the same period last year. Best Buy has been facing this downward trend for the past three years, and while Best Buy CEO Hubert Joly has a 5-point plan, called “Renew Blue,” to turn the company around, only time will tell before we can see if Joly’s influence can turn around the consumer electronics retailer.
I started thinking about a post-Best Buy world and what that would mean for us as consumer electronics fans. Best Buy may not close up shop tomorrow, but at the current rate losses are trending, it’s only a matter of time. I know many consumers (myself included) use Best Buy as their showroom to touch, play and analyze gadgets before going home or jumping on the phone to make an online purchase. In college, I used to go to Best Buy at least once a week, usually on Tuesdays, when new DVDs or CDs would hit the shelves (yes, I know physical media is dead, but this was a decade ago, before iTunes and Google Play) and just play with cameras, computers and whatever else they had laying around, now I waste my money on silly things like bills and groceries.
Best Buy, and stores like it, have a wide variety or electronic products, maybe not as much as websites and a fulfillment centers, but certainly more than a big box store like Wal-Mart or Target. I love being able to pick out a camera from a sea of lenses and shutters, like I am picking one that is specifically made for me. Closing Best Buys would be a ultimate convenience-suck, where else am I supposed to go get the latest and greatest gadget NOW? When I need that proprietary plug/battery/remote today how am I going to get it? Where else can I camp out for the crazy black friday deals/Black Ops II/Wii U release. When competitors leave a marketplace, you’re bound to see a price hike as consumers have less options to purchase goods.
I’m sure when the day comes, we’ll manage to find alternatives, but I dont want to. Maybe its only fitting that Best Buy goes out of business after putting mom and pop stores out.
How to save Best Buy
No, your online petition won’t help you save Best Buy, and don’t bother chaining yourself to the sliding doors either, it won’t work. Obviously, for Best Buy’s sake, they need to get customers back in stores and have them walk out with purchases. Joly’s 5-step turnaround plan is a lot of corporate gobbledygook and really doesn’t mention details on a planned turnaround. If anything the Renew Blue policy is more about improving the customer experience and cutting costs, I think the real reason Best Buy is suffering is the aggressive pricing of online retailers. Best Buy has taken a huge gamble by trying to compete on price with e-tailers by price matching online deals. Sure its great to get consumers in stores and even if you don’t get the best deal (if you’re not a savvy deal finder), the possibility that you are able to get a good deal will probably get you to at least come in. Best Buy will likely take a hit on profits when price matching online retailers, but really, what do they have to lose.
I say Best Buy needs to put those Geek Squaders to work, I often see a lot of the Geek Squad folks off to the side without customers to help out (not always true), why not package a year’s Geek Squad support when you buy any electronic or appliance from Best Buy. In all likelihood, any servicing can be sent back to the manufacturer (since it should be covered in the warranty) and while Best Buy will increase costs by offering this service, it competes against Amazon and other online stores by offering a place to bring in your busted device for serving, something those other guys can’t touch.
Speaking of Amazon, thanks to various states instituting sales taxes, Best Buy has a better chance for survival. One of the main reasons I purchased through Amazon was tax-free purchases (along with price and free-shipping). If I can price match Amazon’s prices and pick it up the same day, I would choose to make my purchases through Best Buy and not have to wait for Amazon to ship it. Sales tax will quickly infiltrate your state like it has mine and every state legislature wants a piece of the online retailer’s sales. But it gives Best Buy and other brick and mortar stores a chance at survival.
I hope to see Best Buy around for many years, so I can walk around aimlessly and waste time playing with the latest Samsung TV or Canon camera, its one of my favorite things to do. It just isn’t the same wandering through a Whole Foods and playing with cheese.
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