Now that Best Buy, Inc. (NYSE: BBY) is the last surviving member of the national specialty consumer electronics retail club, where can it go? Up and up. Sure, mass chains like Wal-Mart Stores, Inc. (NYSE: WMT) and others have stepped up to the plate and are greatly enhancing their consumer electronics sections, but then again Best Buy has a new CEO who is thinking differently and isn't going to give an inch if he can help it.
Yes, consumer electronics sales have been diving and may continue to dive this year, leaving Best Buy holding the bag since it is the only specialty consumer electronics retailer left. But if there is any margin left to get out there, it will be Best Buy's.
Consumer electronics margins can be incredibly thin, something Best Buy CEO Brian Dunn isn't going to be passive about. Say goodbye to a focus on music and movie media and bring on the "connected" lifestyles. Yes, we've heard this before, but Best Buy has little choice this time. It has to follow margins, not products of popular (but declining) influence.
But the areas Dunn has publicly emphasized -- low-cost laptops and mobile phones -- aren't exactly new either. Low-cost laptops surely don't carry a ton of margin for any retailer (or manufacturer, but they'll take what they can get), and now that everyone and their dog has a cellphone in the U.S., selling mobile means constantly swaying customers from one wireless carrier to another. There's got to be more to Best Buy's future success plans than that.
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Reader Comments (Page 1 of 1)
7-22-2009 @ 3:44PM
Steve said...
Best Buy M&A history:
http://www.alacrastore.com/mergers-acquisitions/Best_Buy_Company_Inc-1002077