Best Buy was once a powerhouse of gadgets and electronics, ready and eager to serve tech-hungry consumers of all ages. The brick-and-mortar store enjoyed many prosperous years that resulted in billions of dollars in revenue and hundreds of thousands of jobs. However, with the shift into digital retail, people are becoming more eager to shop online, leaving Best Buy to catch up or sink.
Many consumers presumed that Best Buy would never recover from the digital shift. The company did too little too late in terms of preparing for the digital age, and stock prices showed that many were losing faith in Best Buy’s ability to compete with online retailers like Newegg and Amazon. Not only were they competing in convenience, but more often than not, digital retailers had the same items for a much lower price.
However, Best Buy’s CEO, Hubert Joly, is optimistic about the future of Best Buy, and he claims that many of the company’s strengths come from aspects of business that digital retailers simply don’t have. For instance, a customer who searches Amazon for an item can’t try that item in a store before they buy — it’s one of the main disadvantages to buying anything online. Joly plans to take that disadvantage and turn it into a key feature of Best Buy. Because Best Buy’s leases are generally long term, breaking them to close down shop and focus on an online presence would be insanely expensive.
Joly also plans to take advantage of Best Buy’s existing online business by making the most of its shipping options. Most products purchased online can be delivered to a store for same-day pickup, giving Best Buy the instant-gratification advantage over online retailers that can take days or even weeks to ship a single item. Though Amazon Prime allows for free two-day shipping, most Best Buy stores provide free same-day pickup for items purchased online.
Another strategy that Joly plans to implement includes a highly specialized staff who can compete with the staff at Apple stores and other high-end retailers. For example, if customers come in to purchase a camera, a specialized sales associate can assist them by comparing models on a tablet or computer and offering sound, knowledgeable advice. Best Buy’s Geek Squad service is also a valuable asset that no digital retailer can offer.
Best Buy faces many difficult challenges in its shift to the digital marketplace, but its brick-and-mortar stores offer it a tactical advantage in the ever-evolving business world. Despite many consumers’ belief that Best Buy would crumble under the pressure of online retail, Hubert Joly expects to make the most out of the situation by emphasizing Best Buy’s strengths, not folding under the weight of its weaknesses.
Image courtesy of Tim Reckmann at Flickr.com