Best Buy’s Slow Demise
Over at Forbes.com there is really good article that talks about the slow, inevitable demise of Best Buy. The author talks about a recent, poor, experience at Best Buy and then looks at the overall factors against the retailer. The most obvious point to make is that e-commerce has made a very large dent in Best Buy’s market share. This is quite true overall. However, why is it true?
In 1990 Best Buy was taking in over $1 trillion in annual revenue. In 2011 that numbered dropped all the way down to a little more than $60 million in revenue. Conversely, In 2010 Amazon.com took in revenues of over $34 billion which is an increase of over 40% from the year 2008. Even if we assume that the internet is killing Best Buy we have to wonder why.
Unfortunately, the answer is simple. They failed to evolve fast enough and are guilty of marketing myopia. They got used to business as usual and failed to embrace change fast enough. If they had truly embraced the internet much sooner they might still be on track for consistent growth.
They should however still have a competitive advantage over online retailers though when it comes to customer service. Unfortunately for them, they don’t. Being able to speak directly to a person to answer your questions should help overcome the lower prices of online retailers. However, as pointed out in the Forbes article, their staff is not knowledgeable and is more interested in up selling than customer service. You would think that the Circuit City collapse several years ago would have given them fair warning. At this point in time it seems that Best Buy is content to go for the quick buck and deny the slow death that awaits it.
http://www.forbes.com/sites/larrydownes/2012/01/02/why-best-buy-is-going-out-of-business-gradually/
http://en.wikipedia.org/wiki/Best_Buy
http://en.wikipedia.org/wiki/Amazon.com
http://finance.yahoo.com/q/is?annual&s=amzn
Star Wars water anyone?
I’m not entirely sure how much the fancy water drinking crowd crosses over with the Star Wars geek crowd. One this for sure though, Star Wars fans will buy anything related to the series, and these bottles actually look pretty slick.