Best Buy to shutter 50 superstores & open 100 small shops
Best Buy announced on Thursday that it plans to axe 50 U.S. stores, lay off 400 employees and slash $250 million in spending by 2013. The drastic measures follow a less-than-exceptional fourth quarter performance report for the retail giant — one more sign that big box stores may be fast approaching their twilight years.
Part of the problem, as Business Insider notes, is that consumers are savvier than ever before. They know that those pricey whiz-bang devices and DVD box sets on display at their local Best Buy can usually be had for far less through online shops. Shoppers use stores to try before they buy. Unfortunately for Best Buy and others, where they buy is more and more someplace else.
Best Buy CEO Brian Dunn believes that cutting a few dozen auditorium-size superstores while opening 100 small-scale Best Buy Mobile shops will help the company in the long run.
“As part of our multi-channel strategy, we intend to strengthen our portfolio of store formats and footprints — closing some big box stores, modifying others to our enhanced Connected Store format, and adding Best Buy Mobile stand-alone locations — all to provide a better shopping environment for our customers across multiple channels while increasing points of presence, and to improve performance and profitability,” said Dunn.
That doesn’t really address the root problem facing the business: consumers are increasingly becoming online shoppers, and the road to the lowest possible prices does not end at brick-and-mortar shops. Why should I spend $34.99 for Justified: Season 2 on Blu-ray at Best Buy when I can buy it for $10 less at Amazon?
To Best Buy’s credit, some improvements to its Reward Zone Silver loyalty program sound nice. Members will receive first crack at big sales, a free visit from Geek Squad, free expedited shipping and more, the company said. Employee training will also be revamped, playing to one of the few aces left up retail stores’ sleeves: human interaction.
It’ll be interesting to see if Best Buy can remain relevant to consumers in the next few years. Last summer, bookseller Borders collapsed as consumers took their business online and snatched up ebooks.
4 Comments on Best Buy to shutter 50 superstores & open 100 small shops
- Posts: 30
- Posted on: 30 Mar 12 01:26
- Posts: 102
- Posted on: 01 Apr 12 21:40
- Posts: 980
- Posted on: 03 Apr 12 22:25
Nevertheless, I dont' see why they can't leverage online ordering as a local warehouse distribution system.. Walmart's stuck their toes in these waters from time to time and even Target's made an effort to try it. Nevertheless, as gas prices rise this summer, there's really no way people will even want to step foot in a store this summer let alone buy anything at sky-high prices. Leading to the chicken and the egg problem. If you jack up prices, will anybody be willing to spend $5/gallon+ on gasoline to go out & buy?!? probably not. As it is, when it's grocery shopping day, I make a stop on my way back from work so it's not really out of my way. I also stocked up in march, because in April - September we see massive inflation of consumer goods due to high gas prices.
- Posts: 1777
- Posted on: 04 Apr 12 05:00
I also got 5 car HD radios in early 2008 for 25 to 30 each brand new when one of the semi close Best Buy store decided they weren't selling fast enough and discontinued them and fire sale'd their stock.
I still use it today in my car and my Mom and step dad and sister have one each too.
If you watch the sales and the deal sites you can find some stupid price deals just about anywhere.
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