Assignment 5.1: Future of Retail
There's no question that a lot of Best Buy's business is shifting to online retailers. Internet delivery of music and video is hurting Best Buy CD and DVD sales. Plus, in TVs, laptops, tablets and cameras, online retailers like Amazon can beat Best Buy on price, since they have lower overhead and typically do not collect state sales tax. A lot of consumers check out products in Best Buy stores, then buy them online at a lower price.
Wholesaling vs. Retailing
Superstore retailers like Best Buy have traditionally aimed at meeting consumers’ total needs for electronic items. Like retailers, wholesalers must decide on product and service assortments, prices, promotions and place. Best Buy’s wholesalers must find better ways to meet the changing needs of not only Best Buy, but their customers. The wholesaler’s only reason for existence is from adding value by increasing efficiency and effectiveness of the entire marketing channel. So goes Best buy, so goes the wholesaler.
The challenge for Best Buy is simple: It can't be the showroom for electronic sales online. The store's prices will never beat Amazon's. Price-conscious consumers simply give a product a test drive in store and leave with the product number to buy online. To differentiate, Best Buy will have to focus on service. As an exclusive electronics retailer, its staff is more knowledgeable about its products and can help customers find what they are looking for. Best Buy CEO Brian Dunn said they will change its employee compensation model to revolve around customer service and business goals. They should provide free shipping, provide ongoing support for their products, and no-hassle price matching. A quick visit to their website goes into great detail about their price match policy. The list of things that disqualify a price match is quite extensive, including if an item is advertised as "limited quantity”. Let’s make it simple.
Everyone has an...