Excellent piece on Slate.com by columnist Farhad Manjoo, in which he writes about what Best Buy needs to do in order to survive in what for it has become an increasingly hostile retail environment. “Best Buy is in a lot of trouble,” he writes. “Once the undisputed leader in technology retail - it vanquished Circuit City, CompUSA, and every mom-and-pop electronics store in the country - the company is now being killed by Amazon online and Apple offline.”
Manjoo says that Best Buy’s big problem is that in an age of commodity electronics, it continues “to wave the banner of endless selection,” which does nothing for the customer except offer clutter and confusion. He writes:
“It’s time to abandon the idea of endless selection. If Best Buy wants to survive, it’s got to replace its hulking, teeming stores with smaller, less crowded, more intimate spaces. When you walk in to buy a 32-inch TV, the guy in the blue shirt shouldn’t make you choose between a dozen nearly identical models. Instead, he should show you a single set, a TV that Best Buy’s experts have determined offers the best features at the best price. The firm could do the same across its inventory, culling the tech universe down to a few essential, can’t-beat products. In this way, Best Buy would transform itself from a supermarket into a boutique - a place with fewer things for sale and lots of friendly, sophisticated, helpful experts who’ll save you the hassle of researching your next TV or PC purchase. They’ll do all the work for you.”
Being big, Manjoo writes, “big has become the domain of the Web.” Online stores do it better, can always offer more selection, and almost always will be able to undercut the prices offered by physical stores with higher cost structures; they also can take advantage of - or even encourage - the “showrooming” trend, in which consumers go into bricks-and-mortar stores to look, and then buy online. And so, by becoming more specific and specialized, and putting a greater premium on service, Best Buy at least has the chance of becoming more relevant rather than trying to compete in a game it cannot win.
Manjoo says that Best Buy’s big problem is that in an age of commodity electronics, it continues “to wave the banner of endless selection,” which does nothing for the customer except offer clutter and confusion. He writes:
“It’s time to abandon the idea of endless selection. If Best Buy wants to survive, it’s got to replace its hulking, teeming stores with smaller, less crowded, more intimate spaces. When you walk in to buy a 32-inch TV, the guy in the blue shirt shouldn’t make you choose between a dozen nearly identical models. Instead, he should show you a single set, a TV that Best Buy’s experts have determined offers the best features at the best price. The firm could do the same across its inventory, culling the tech universe down to a few essential, can’t-beat products. In this way, Best Buy would transform itself from a supermarket into a boutique - a place with fewer things for sale and lots of friendly, sophisticated, helpful experts who’ll save you the hassle of researching your next TV or PC purchase. They’ll do all the work for you.”
Being big, Manjoo writes, “big has become the domain of the Web.” Online stores do it better, can always offer more selection, and almost always will be able to undercut the prices offered by physical stores with higher cost structures; they also can take advantage of - or even encourage - the “showrooming” trend, in which consumers go into bricks-and-mortar stores to look, and then buy online. And so, by becoming more specific and specialized, and putting a greater premium on service, Best Buy at least has the chance of becoming more relevant rather than trying to compete in a game it cannot win.
- KC's View:
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I have no idea if this will work; to his credit, Manjoo concedes that he does not, either.
But the central point is a good one. If you are going to compete in a cutthroat environment, you cannot do so by playing into the strengths of the other guy, even if those used to be your strengths. At some point, you have to recognize that the world has moved on, and create for yourself a new differential advantage..
Or, you can kid yourself and just watch the whole thing die.
Your choice.
