What’s the old joke: Best Buy is Amazon’s showroom?
Just a few years ago, Best Buy was hailed as one of the finest retailers in the world. It had vanquished its rival, Circuit City, and was likely selling more electronics per square foot than any other company. But by 2012 it was in tatters. Its CEO, Brian Dunn, had resigned after an alleged “inappropriate” relationship with a female employee erupted into scandal. In the ensuing chaos, Best Buy’s legendary billionaire founder and largest shareholder, Richard Schulze, began a campaign to wrest back control of his blue-shirted baby through a private-equity buyout. Meanwhile, the tough economy had not been kind to Best Buy’s bottom line: Profits in the second quarter of 2012 plummeted 91 percent from the same period in 2011. Over the past two years, the company’s share price has fallen 60 percent.
But Best Buy faced an even more fundamental challenge: The entire big-box retail industry appeared to be dying. Consumers were moving away from the one-stop shop, favoring more bespoke experiences like those offered in the famously profitable Apple Stores.
I don’t agree that consumers are moving away from one-stop shopping. I would think Target and Walmart are still doing pretty well. It’s just that, when it comes to Best Buy you can buy the same thing cheaper (televisions, mostly) on Amazon and still have it at your house within a few days. I don’t even know what you would buy at Best Buy anymore? A computer? Cellphone? Video games? That’s the problem essentially. There’s no reason for the store to exist.