This guest blog post is from TMC Senior Editor, Peter Bernstein, a respected analyst covering technology and communications for a number of years. Peter’s post addresses my recent comments about what Best Buy can do to make it in the new world of digital competition from the likes of Amazon and others.
WalMart, another “Big Box” national franchise that destroyed most local merchants and devastated Main Streets and property tax bases, has done quite well with people ordering online and picking things up at the store. This enables them to meet the competition on pricing and obtain additional spontaneous discretionary spending – a strategy our friends across the street at Costco have mastered.
Best Buy was a “disrupter” that has not adapted. Calling them “local” merchants, especially based on my experiences over the years in asking such “local” merchants to contribute to local fundraising events (Little League, Temple and town charity events, the Senior Gala, etc.) was an exercise in futility. The Big Box guys speak of being good neighbors but I think a study would prove my anecdotal experiences are common and that the degree of their helping the community is a myth. And, that is without getting into the “quality” of the jobs they create as opposed to those they have displaced and the impact their presence has on overall community well-being.
If Best Buy offered a truly differentiated “customer experience,” for instance got the blending of online and physical correct and had very knowledgeable sales people, I think most people would pay the premium for being in the stores.
Since Best Buy is dealing with commodity products that are readily available from a variety of sources, their value-added should be derived from things like the “Geek Squad.” Apple has proven that re-defining the physical shopping experience by having people who can fix your problems available to do so, along with having a pleasing environment for spending quality time, is a formula for success.
The bottom line is that as we know from the industries were cover to the disrupters goes the spoils. My opinion for what it is worth is that taking pity on a company that is behind the times is not the way to go. It only encourages them.