Bob Collins
Wired.com has noticed that Best Buy’s stock has tripled so far in 2013, suggesting that it’s back from its near-death experience.
Best Buy has shown a willingness to leverage its stores as more than just a place to sell to brick-and-mortar shoppers. The company says that 50 of its stores are involved in a pilot “buy online—ship from store” program where the stores themselves rather than distant warehouses act as distribution centers.
And it’s been quick try other experiments in distribution, such as partnering with eBay Now, which offers one-hour delivery of online orders picked up by couriers from local stores.
If Best Buy hopes to stay competitive with Amazon and keep its stock soaring, it will be through this kind of creative re-use of real estate. Same-store sales were still down this quarter compared to the same time last year, which Joly blamed on the costs of launching its Samsung and Microsoft stores-within-the-store, as well as efforts to re-engineer its floor space.
Still, stores will have to do much better to justify the extra cost, both of managing the real estate itself and matching Amazon’s prices.
But Wired isn’t ready to say the Richfield-based company can still make it in the era of Amazon.
In a retail future powered by million-square-foot Amazon warehouses on one end and lightweight distributed delivery networks on the other, all tied together by mobile devices that enable shopping anytime, anywhere, big box stores are in danger of becoming empty shells — the hollowed-out fossils of an obsolete business strategy.
Cost-cutting may prop up quarterly numbers, but it doesn’t make a company more relevant to consumers.
That suggests, as Wired’s headline did, that Best Buy is merely “walking dead.”
Indeed, the Star Tribune reports that most of the company’s impressiveness these days comes from cost-cutting, not from increased selling.
What could change that? Maybe this: A rumor that the company is cutting a deal to be the exclusive retailer of Google Glass.
