Best Buy To Close 50 Stores, Cut 800 employees. Where Is Retail Heading?

| March 29, 2012 | Reply

Best Buy announced their earnings today, and it wasn’t great. The company didn’t meet expected sales and is restructuring to give better customer service to potential buyers and cut back on the big box “find it yourself” type feel in stores now.

With these sales figures it makes you think about the future of retail, at least for electronics. I pretty much blame Best Buy for the downfall of Circuit City, CompUSA and Service Merchandise. But if Best Buy is starting to falter, who is taking their sales? Well, the internet honestly. It is getting to the point where it is easier and cheaper to order from a company like Amazon than it is to go to a retail store. Amazon has a better return policy, and gives you $4 overnight shipping on any item if you have a prime membership. Aside from just actual hardware and technology sales, Amazon has hit Best Buy in software and media. If you do have a Prime Membership ($79 a year) you get access to thousands and thousands of movies and tv shows for free. The ones that aren’t free are cheap, and stream instantly to pretty much any device with an internet connection.

On many occasions I have shared my thoughts with friends and colleagues about the future of tech retail. I told them I could imagine a store made by a company like Amazon that takes a completely new view on supply and sales. Humor me for a minute if you will, and imagine an Amazon retail store. When you walk in, it is huge. As large as or larger than current Best Buy Stores. But the Building is Much smaller. See, Amazon would have demo units of the top 10 of many different products, with very well-trained staff to discuss and recommend products to you. You can try them out, and then decide. After that, the employee offers you free ground shipping. If you have a prime membership, you have the option of free two day shipping or $4 next day shipping if ordered by 7pm. In one of the ends of the store is a Starbucks or small coffee shop. Inside you can rent a tablet or bring your own wireless device to relax and try out a product in a real world scenario, or just watch a free movie or TV show. While watching you have the option to purchase more music by the artist or movies in the genre.

How would this be different than current offerings? How is it better than grabbing what you want right now and taking it home? Well, money is one main reason. On average you can save 15-20% on electronics by ordering online over retail. On small accessories you can save much more. For example, I can get a screen protector for my phone from Amazon for $2 shipped. Three of them actually. At Best Buy I will currently dish out $20 for a single one. Those may be better quality, but I could buy 30 for the price of one at the big box. So if I changed it once a month it would still take me 2.5 years to equal the price of buying one from big blue. Then you bring he ease of black Friday into the mix with buying online, and it’s a no brainer.

If you think my idea is crazy you may be right. But Best Buy is starting to agree. They are focusing on smaller stores with better trained employees who can tell you more than “this one is better” because it costs more. While closing 50 Big Boxes, Best buy is going to open up to 300 new smaller retail and mobile stores. See, if it’s easier and cheaper for me to order my next TV from my cellphone while sitting in a park on a summer day, why would I drive into the city to go to a store?

Going further than just electronics, the change will eventually hit more areas of retail. Before long you will be able to step in front of a screen, and some cameras will scan your body and know exactly what size of clothing you need. They will be able to show you what you look like wearing these clothes without having to try them on. This type of technology is already being used in Europe and will continue to gain traction. I could even envision a new type of makeup counter. You can walk up, scan your face and it pops up on a screen. An easy to use interface somewhat like Photoshop comes up and you pretty much draw they colors and style of makeup you want to go with that particular day. You get a nice composite and if you like it, lean your forehead against a pad and let a machine do your makeup perfectly based on your specific facial structure. That may be far off, but not too far.

Consumers and retail are both getting smarter. It’s about time that retail gets easier just like technology makes so many other things easier.

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Category: Tech News

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