Best Buy, Inc. (NYSE: BBY) has seen its largest rival, Circuit City, go down forever. Now that the competitor is completely gone, a new arch-rival -- Wal-Mart Stores, Inc. (NYSE: WMT) -- wants to step up the competition in a price war that it controls. So Best Buy wants to amp up the competition not with price, but with something more.Don't mosy down product aisles filled with stacked merchandise boxes and boring displays, says incoming Best Buy CEO Brian Dunn. How about seeing a real-life demo of your family captured on an HD camcorder, or stepping into an actual video game? Dunn is hoping these interactivity features will get customers seeking out Best Buy for those consumer electronics purchases instead of Wal-Mart. The move comes as both Best Buy and Wal-Mart are beginning the fight to take over whatever business dollars defunct retailer Circuit City commanded before it closed its doors earlier this month.
Dunn's gunning for the interactive showroom floor. Imagine heading into an auto dealership showroom to sit in, feel, and emotionally connect with the car you're caressing. That's what Best Buy is going for, as opposed to the warehouse feel it believes Wal-Mart is providing its customers. Dunn, who never attended college but made his name with innovative selling techniques on Best Buy's early showroom floors, believes the interactive approach plus the strength of the blue polo short-wearing floor employees. Once he takes over the top spot at Best Buy in June, he'll be proven right or wrong as his company faces a flat economy and a stronger-than-ever competitor in the consumer electronics space.
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Reader Comments (Page 1 of 1)
3-17-2009 @ 7:28PM
al coholic said...
Circuit City may not be around anymore but Best Buy will still lose ground to the Internet outlets and Wal-Mart for price.
Savy customers already check out stuff at Best Buy and then order it on line for 10- 20% less. And Wal-Mart will cull off a large number of the people who compare prices.
Best Buy is in danger of turning into the next Tweeters.
3-17-2009 @ 7:38PM
inteller said...
I buy my electronics at Best buy because the displays look better.....?
not.
based on that theory, I buy everything at home because the displays around here are better than anything best buy can come up with.
3-17-2009 @ 8:04PM
mikemaj82 said...
wow who is this guy? In these times, people want a better price, bottom line.
3-17-2009 @ 10:29PM
MatWith1T said...
It's a great theory until you actually walk into a Best Buy and experience the blue polo-shirt sporting employees in action. Jokes and stereotypes about car salesmen aside, it works for cars because those people are actual salespeople. They have people skills and an incentive (commissions) to sell. Best Buy employees don't differentiate between that job and any other part time work, and really aren't motivated to increase the stock's EPS.
I have left thousands of dollars of merchandise at Best Buy because I was ready to buy and couldn't find one employee willing to go grab the box from the back room or answer questions about shipping or backordering.
3-18-2009 @ 1:10PM
Iridium said...
Ahh so now I know who to put on my list for the death of the well paid worker at an electronics store.
Workers that could make $20 an hour on commision were forced to drop to $7.50 an hour, way to go. I wonder who took the extra profit.
Best Buy compied many of its store department concepts from Micro Center. They haven't ever come up with anything new. They just sold goods at a better price in a large enviroment. I created the digital imaging department at Micro Center in 1998. About 2 years later the concept was copied by Best Buy in an almost identical fashion.
With Walmart as a principal competitor Best Buy will lose. However that is all based on Walmart getting better access to higher end merchandise. You don't see Sony Z series or other higher end sets in Walmart.