Times like today aren’t looking to bright for Best Buy. They have just announced that they plan to cut over 50 of their retail stores over the next year. Competition is just becoming to tight between Best Buy and Walmart,Amazon,Apple,etc. In-store purchasing of electronics isn’t the same these days as they were 10 years ago, the internet has taken over. People are less afraid to enter credit card information on the internet, and its overall more convenient to have the item shipped. This move was a result of a $1.7 billion fourth quarter loss, which recently ended on March 3rd.
Along with closing 50 stores they have plans to cut around 400 jobs in corporate and support area’s. They’ve actually set a goal to achieve a total of $800 million in cost reductions before the fiscal year of 2015.
The main problem with Best Buy is the useless products they are still selling. I would walk into their store and pass the CD and DVD section thinking it was 2005. People these days mainly purchase music online, via iTunes,Amazon,Google, and a wide variety of other sellers. I haven’t even purchased a DVD in-store myself in around three years, and its all thanks to online streaming. When I want to purchase DVD’s, I order them online.
So, what is going to happen to Best Buy? Check out what CEO Brian J. Dunn had to say:
“These changes will also help lower our overall cost structure. We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices — which will help drive revenue,”
We all remember what happen to Best Buy’s formal rival Circuit City back in 2007, and that’s exactly what Best Buy is looking to avoid. They may be closing stores, but they plan to open up 100 Best Buy Mobile stores within the next year. These stores will focus on selling smart-phones,tablets,e-readers, and other popular items as of recently. These stores won’t be your large typical Best Buy, but smaller, around the size of a radio-shack. They will cost less to run, but does this really mean more customers will visit them?
Would you be more likely to buy from a ‘Best Buy Mobile’