How the brick & mortar model needs to evolve to include a strong online footprint to function as an enabler. While a lot has been written about how pure online retail players are cannibalizing existing market share and grabbing growth from brick& mortar model retail players, what has perplexed me is how little the incumbents( the best buys and the targets ) have done to change the growing trend. I do agree that these brick and mortar players have significant cost overheads in maintenance of property and equipment and personnel costs , advertising and utilities . But the very fact that they are present in so many cities should help them to provide same day fulfillment and help them to achieve greater customer satisfaction. Just visualize how mobile signals are handed over from tower to tower based on the geographical reach of a tower , thus covering a vast territory. If these brick and mortar players have a decent online platform, offer comparable prices along with certain degree of free customer support and an immediate and quick fulfillment platform at free or comparable prices( to USPS OR UPS) through the ‘mobile tower’ like mechanism (maybe loosely term it as a hub and spoke fulfillment mechanism).
Since the of return founder Richard Schulze and its partnership with Samsung to place many stores inside its thousand locations, there remains a single and massive problem. Best Buy Co. Inc. (NYSE: BBY) continues to have too many stores in the United States. Until that issue is addressed, Best Buy will continue to be also-ran because the cost of operating bricks and mortar locations and the fact that it still sits hopelessly behind Amazon.com Inc. (NASDAQ: AMZN) in terms of its presence on the Internet.
Wall St. has pressed up Best Buy shares to more than double their value since the beginning of the year. The price is still well below where it was two and five years ago. Investors are willing to gamble on a turnaround, but they not been sold on the notion that the retailer can ever get back to its glory days…
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