We all could see this coming. Best Buy has become the latest retailer to change its business model after technology has changed the we we live our lives. Blockbuster went bankrupt (only to be recently purchased by Dish Network). Circuit City went belly up. And retailers like FYE have reduced the size of its stores to that of a walk-in closet.
Best Buy, coming off a nearly 5% drop in sales, announced it is reducing the size of its stores by 10% – read: reducing staff – and expand its Best Buy Mobile stores that focus on service, as well as renew focus on online sales.
This is a fine first step and all to adapt to today’s ability of the consumer to buy hardware, software and even content through the Internet. Today’s retail world is about the consumer not being tied down to a brick and mortar building more now than ever.
The question, of course, is whether it’s too late. It has always shocked me by how slow Blockbuster moved to adapt, thus failing. The demise of Circuit City was remarkably swift. Even Walmart is reporting a drop in in-store electronic sales.
My belief is that Best Buy will never be what it was once, because nobody can. The control of choice and time has shifted to the consumer and retailers like Best Buy look outdated if they don’t radically change. More than that, consumers are embarrassed to enter one of the outdated brands. For the last few years, going into a Blockbuster was akin to being in the witness protection program. You didn’t want to be seen because it meant you were behind the times.
At least Best Buy has something of a brand, something few in the retail sector do. It has permission to change because its brand is based on purchasing and value. But it is in serious danger of feeling outdated because the brand is still about the retailer, not the consumer.
To make this venture – and, no doubt, other ones to come – Best Buy must modernize its brand. Shifting the business model is nice and all, but it’s not enough and time is running out. Without a change in meaning, this shift just means the drop in sales will continue – just more slowly.