Is Best Buy The Next Electronics Store To Move To Web?

Recent financial information from Best Buy show they are struggling to complete.

Best Buy has become a place where people used to travel to make technology related purchases. Over the years, I have bought a few TV's there as well and while the service from store personnel may have been better, I knew exactly what I needed and purchased it. That has been the case for myself. But others have found the level of service to be changing in recent years and the past year has been one which is showing some of the problems Best Buy is experiencing. It would appear that Best Buy is trying to figure out where they fit in the big box store model and this past week they found they are not able to compete in that space as they once did.

I remember a few years back going into my local Best Buy and seeing a section being changed to now sell electric bicycles. It was a strange thing to see when you think of Best Buy and see them as selling technology related items such as computers, cell phones, TV's, etc. This sight showed me that they were having an identity crisis in trying to figure out what they are. They have always sold refrigerators, washers, dryers and other household appliances. I could never figure out how that fit into their business model of being known for technology.

If you look back in time, you can see other big box type stores who were trying to figure out what they were all about and in the end, they moved to the web and pretty much closed up shop for their brick and mortar locations. CompUSA was a well known store in California and had locations across much of the US. Today, there are 18 stores in Florida and some in the states of Delaware, Georgia, Illinois, North Carolina, Texas and Peurto Rico. They seem to have lost their way and purchased The Good Guys and folded their California operations into the stores. They created a TV department in their stores to compete with Best Buy as a store within a store in 2005.

That decision never paid off and the stores started to decline shortly after that. With the decline, stores stated being closed in 2006 and continued for several years until they were purchased by Systemax in 2008 with a much larger list of store closings. If you had shopped CompUSA stores, they ran into problems with a lack of staff so you could never find anyone when you needed to get a question answered. That, along with increasing competition from Best Buy and Circuit City made things difficult for the company. Today, there is not much left of the once large chain. Some of the things which happened to CompUSA are happening to Best Buy.

Circuit City is another one of the big box stores who did not survive the bricks and mortar days and now only exists with a web presence. Here in California, their stores seemed to be laid out far differently than others with what seemed to be walled areas, but you were able to find knowledgeable people to answer your questions. In the 90's, they sold appliances which made it a strange combination for a store known for technology. They got out of that business in 2000. The competition with Best Buy was hurting them by 2008 even after they launched their Firedog home service to compete with Best Buy.

Due to the economic problems beginning in 2008, they were trying to make some financial moves to carry the company for the next few years but were not able to succeed. By 2009, they had liquidated all of their locations and moved exclusively to the web. The changing economy and technology was making it very difficult to compete for them along with competition from Best Buy. Now Best Buy is feeling the same problems several years later because of the economy and changing technology.

Purchases have moved to the web or to product specific stores. Wireless carriers have become destinations for smart phones and are very profitable. Best Buy is still selling appliances which take up a lot of unnecessary floor space. They should have been gone years ago. With the changing technology for music, fewer CD's and DVD's are being sold as everything has moved to electronic files and downloads over the web. Best Buy is still devoting a lot of space to music and movies that they cannot afford and are slow in correcting.

Losing $1.7 Billion in a single quarter is huge. Some might think they can recover from that, but there are many other big problems with the retailer. The fiasco of canceling online orders days before Christmas has seriously hurt their reputation and the explanations do not match what has happened.

So now Best Buy is talking about closing some stores and opening some smaller specialty stores. Once you start closing stores, it is too late. You have started down a path from which there is no return. There are lots of examples over the years of this and CompUSA and Circuit City are two of the recent ones. It looks like Best Buy has not kept up with the times in their stores and not focused on the electronics as they should have which are ever changing and ever profitable. They are destined to become a web online company.

Do you think they are going to be able to survive as a brick and mortar store?