Electronics retailer Best Buy, which is responsible for 18% of all electronics sold in the U.S. by brick-and-mortar stores, is planning to shrink the amount of space its stores devote to DVDs and video games in order to increase the area dedicated to hotter categories such as smartphones and tablet computers.
Best Buy CEO Herbert Joly told Home Media Retailing, “I love these categories (DVDs, games), but they’re so 10 years ago. And of course the Tuesday release is not a factor anymore, it’s not a driver. So the floor space optimization plan again is to shrink these categories and emphasize the categories where we can grow.”
82% of Best Buy’s sales come from its brick-and-mortar stores, which receive some 600 million customer visits per year. The company is planning to upgrade its online sales in an effort to combat “showrooming.” Best Buy has a smaller market footprint online, where it accounts for under 7% of electronics sold than it does in the brick–and-mortar world (18%). Unlike most retailers victimized by “showrooming,” Best Buy does have its own vigorous online site, though it still lags behind Amazon and others in selection and ease of use (over 50% of the items in Best Buy online shopping carts never make it to checkout).
Online competition and “showrooming” have been big problems for Best Buy, which has been dealing with management scandals and downsizing issues during the past year (see “Best Buy Lays Off 400”).
As independent retailers have found with the demise of mainstream book retailer Borders, which opened up some opportunities for selling manga, changing sales strategies among the retailing giants can occasionally provide new opportunities for other retailers.
In Favor of Smartphones & Tablets
Posted by ICv2 on May 31, 2013 @ 9:06 am CT
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