Tag Archives: Electronics

Best Buy 20070222

Marketing Matters: Are Electronic Stores Becoming a Thing of the Past?

Best Buy 20070222
Ivan Oyarzun / Foter.com / CC BY

 

With the recent holiday results released by Best Buy and GameStop, there appears to be a slowing down of the economy in the electronics sector of the market, at least for brick and mortar retail stores. Amazon has taken over, as they have no real competition in online sales, and their prices are forcing stores to look to discounts and other avenues to make up for the lost revenue. Best Buy and GameStop could be the beginning of a trend for other stores specializing in selling electronics, and if changes aren’t made, they could join Circuit City on the list of electronic stores that are no longer in business.

How did this happen? For Best Buy, they aren’t just competing with Amazon, they have to deal with the Apple Store, Costco and Sears who also sell TV’s and computers, and other small or big conglomerates who put electronics on their shelves. The giants of the electronic industry are becoming a thing of the past, especially now that people shop online more and prices are more competitive than ever. It’s how Best Buy is dealing with this situation that is a cause for concern; and the fact that they’re not addressing the real issue.

It has been reported that they’ll begin to drop prices to compete with others in the market, making them no different than the rest. The Titanic is already sinking, these stores are already in the cold water, and now they’ve resorted to try outcompeting as they’re slowly sinking. The earnings reports for the holiday season were not good, yet they’re not making adjustments to an actively changing industry.

What is one specialty that Amazon cannot provide, at least not yet? Computer and TV repairs. Best Buy has the Geek Squad that does just that, but it’s been years since they’ve pushed that service in ads and commercials. They want to expand what the Geek Squad does, but the customers first thought about Best Buy is that’s where they sell new electronics. Maybe it’s time to show the public a new aspect and department that specializes in repairs, not the very tiny service the Geek Squad provides. Walk into a Best Buy store; they’re not marketing that service, despite sitting on a potential gold mine and struggling with new products.

Small businesses who specialize in computer repair on the other hand, are being overloaded with computers and laptops to fix. At some local shops, it’s a four day wait to get your computer back, and the owners of these small stores have more business than they know what to do with. This is where Best Buy needs to step in. Desktops aren’t big sellers anymore, but you’ll be amazed at how many people need them repaired.

As I said before in a previous article, Best Buy needs to advertise on Instagram and Twitter. Millions of potential customers are right there, but they’re not tapping into the resources that are at their disposal.

For GameStop and stores of the like, Amazon is going to be the number one cause of their demise. Customers don’t need to have a video game in their hand when buying, and with overnight delivery, the waiting time isn’t that bad. The same can be said for consoles. There will always be people who are too impatient to wait for delivery and they’ll go to the stores. But especially during the holiday season, the online purchase of these products skyrocket as they’re more likely to be bought as gifts. GameStop is in trouble and there’s no doubt about that, and according to market analysts in the industry, their stock has been on death watch for some time now.

Best Buy still has a chance to stay afloat in the long term, but for stores that sell only video games, the outcome might not be a happy one. For small businesses, lessons can be taken from this. If your industry is changing, you must go with the flow or look ahead to see what the next big thing is to offset keeping with the status quo. The electronic retail industry is in trouble. However opportunities are always available, these stores just need to find out what will work instead of continuing to not address the problem.