How Best Buy Can Adapt To Survive

How Best Buy Can Adapt To Survive

Best buy has been hammered by the online marketplace. When Circuit City closed doors, Best Buy hoped to see a boost that would make them healthy in the big box retail electronics space. But all it did was slow the bleeding, not repair the wound.

In case you haven’t been watching the financial news, Best Buy reported a $1.23 billion dollar net loss for the fiscal year that ended in March, 2012. Many customers visit their local Best Buy store to window shop. They use the chain as a showroom for products that they might be interested in, and then they go home and purchase them for less on the web.

In essence, Best Buy is a showroom for Amazon.com.

The answer and Best Buy’s salvation is in getting way out of the box of big box retailer thinking. They see Amazon as a competitor, rightfully so. Every time a customer visits Best Buy and then buys on Amazon, that is a lost sale. But if Best Buy becomes an Amazon affiliate, they could give customers the option of buying at Best Buy, or paying the lower price at Amazon.com with an affiliate commission going to Best Buy.

Best Buy would still get a small profit from the sale, and they wouldn’t have to work as much. They would not be responsible for warranty repair, product returns, or inventory management for products sold through Amazon.com. At the same time, they would be able to point out the advantages of buying locally, the extras that justify the in-store price.

When customers are presented with the option of taking it home now, or waiting a few days to a week to have it delivered, they just might decide that for a few dollars more, they would rather take it home with them, plus get the extra support. Once they leave the store, it’s a much less persuasive argument, because they need to factor the time and inconvenience in going back to the store.

This would not be a difficult program to implement. Items in the store can include cards printed with QR Codes which the customer can either scan with their smartphone or insert into a conveniently located kiosk. They can get all of the product information and comparison shop in an environment that Best Buy can exercise some influence. Customers can compare the difference in price and benefits, an make their purchase directly from the kiosk. If they purchase from Best Buy, they can take their item home, and if they purchase from Amazon, they simply walk out the door, understanding that they chose to buy from Amazon, but they are still supporting their local retailer.

Would this work? If you were given the option of buying items from Amazon while inside Best Buy, would you? Would you be more likely to buy from the local retailer? Why?

August 7, 2012 / Blog / Tags: ,

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About the Author

Tim is digital marketing strategist and technology solutions architect at ProSocial Marketing, LLC.

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How Best Buy Can Adapt To Survive