Best Buy has a great and rich history. One of the best. It was ranked “company of the year” by Forbes (2004), and is considered one of America’s cultural assets, as well as a massive employer all across the country. Best-Buy is a landmark. When I was little, every visit to the US included at least half a day at Best Buy. I remember running around the store with my two sisters, looking for entertainment, while my father was spending hours with all these cool new inventions: Look at these great cameras! And laptops and here is a printer that can also scan and even has a fax machine…
Best-b uy had changed many faces since its foundation in 1966 as an audio specialty store. Best-Buy was forever known for its competitive prices, the large stores where you have everything from everything. Even today, when I make a purchase of electronics, I go to Best Buy first. I want to touch the different laptops, see how heavy they are, how sleek. What does the keyboard feel like? Which one will suit me best for school? Oh, and it comes with colors, can I see them please?
And then I go on-line. Why? I have more information there than I’ll ever have in any store. No sales rep will be able to consolidate thousands of user reviews into a 5-star ranking, and give me an exact summary of it. Reading an objective opinion of someone who bought and used the product has a thousand times more value of the opinion of a sales person that has never used the product and has a clear incentive to offload whatever inventory that is currently in the store. All the goods and bad in a product, even those that you never thought about, even those that appear only after time – they all come out in on-line research.
From a place that has everything to offer you, Best Buy turned to a single-purpose visit store: Can I just feel this camera one last time before I decide to buy it?
The “Amazon era” is killing it, and something has to be done, fast. The numbers speak for themselves: in the past 5 years Best-Buy delivered 20% decrease in revenues and 30% decrease in the gross income. All the efforts to cut expenses might show not-so-fatal results in the bottom line, but the real bottom line is clear: Best Buy doesn’t sell as it used to.
So what is next? That’s a good question. The future is similar to what I believe will happen to the traditional retail industry. It will slowly die, and replace itself with small showrooms in central locations (no one wants to drive all the way out of the city just to look at the Bose new speaker), extreme customer loyalty programs and promotions to keep the pricing competitive, and in the longer run – I would even assume there is no place for both Best-Buy and Amazon in this world. One will have to go and I have a fair guess on which one. I hope the economy is ready to absorb all these past-retail job seekers that are no longer needed.