There have been numerous stories about how Best Buy is cutting employees and closing stores due to less demand. Now, their CEO has resigned due to unrelated issues with his personal conduct, hinting that they would have kept him on board pending he could keep out of trouble. The real reason the company seems to be in so much trouble is that they are seeing themselves turning into a showroom for online companies such as Amazon. A few reasons why Amazon is able to boast much lower prices are not having a “showroom” and that people are able to skirt paying taxes on items which really adds up when you are buying items into the 100′s of dollars.
Is there any way that Best Buy can avoid being a showroom and start turning these “showings” into sales? I think the best/only way for them to stay viable and quit losing money left and right to internet sales is to lower their existing prices. Best Buy and other now closed stores (like Circuit City) have operated for years if not decades as if they are the only option for many people to get technology items, and they have priced their items accordingly. Carrying years-old technology at nearly twice the price of online isn’t going to work anymore unless online prices skyrocket.
There are very few people that still have a need to buy items from a Best Buy:
1. If you’re a 14 year old without a credit card or extremely slow internet you might be forced to buy a CD of your favorite rap group or whatever from a brick and mortar store, but this even seems to be going away with the prevalence of gift cards making the internet available to people without credit/debit cards.
2. Looking to buy an appliance or TV that you don’t believe can be shipped or you would like it installed.
3. You need the item today, and you’re not willing to wait.
Do you think that Best Buy is doomed like so many other technology oriented sellers? Can they cut enough stores, employees, and prices to remain viable in today’s online society? I’d to hear your thoughts on why you think bricks and mortar stores are going to be viable currently/ in the future.
