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Best Buy Plays Specialty Role to Wal-Mart’s Big-Box Role
No. 1 electronics retailer is emphasizing consultation and interactive demos, eschewing a price battle with the box mover.
With Circuit City and Tweeter out of the picture, the electronics retail eco-system seems to be out of whack.
Best Buy has a new No. 2 U.S. electronics retailer, Wal-Mart, challenging its top-dog status and creating an odd dynamic.
Among former Circuit City customers surveyed by NPD Group, 11 percent plan to buy future electronics at Wal-Mart. That's second to the 55 percent who intend to switch to Best Buy, but it seemingly establishes Wal-Mart as a logical alternative to Best Buy.
Wal-Mart is taking the ball and running with it, according to a Wall Street Journal report. The report refers to Wal-Mart ratcheting up its electronics, a category it credits with a market-leading 5.1 percent rise in same-store sales in February.
The WSJ report also indicates that Wal-Mart intends to battle Best Buy on price. In response, Best Buy intends not to fight that fight. Instead, it plans to ramp up its show experience by emphasizing interactive product demonstrations.
Best Buy's current ad campaign features sales associates talking about problems they solved for customers, perhaps suggesting that box-mover Wal-Mart isn't likely to come up similar solutions.
It's funny how things change.
It used to be Tweeter trying to avoid a price battle with Best Buy, instead focusing on its sales staff's product knowledge and lifestyle-themed stores.
Circuit City also aimed to position itself as more of a solution provider than a product seller, using tag lines like "Just What I Needed."
Perhaps Best Buy learned some lessons from its competition.
Several former Tweeter executives say Tweeter did try to compete on price with Best Buy. That departure from its core philosophy was among the reasons for Tweeter's downfall.
Circuit City's failure can't be blamed on any one thing either, but Jim Ristow of Home Entertainment Source recently suggested that Circuit City didn't do a good enough job differentiating itself from Best Buy. "You can't out-Best Buy Best Buy," he said.
It appears that Best Buy isn't going to try to out Wal-Mart Wal-Mart.
Best Buy has a new No. 2 U.S. electronics retailer, Wal-Mart, challenging its top-dog status and creating an odd dynamic.
Among former Circuit City customers surveyed by NPD Group, 11 percent plan to buy future electronics at Wal-Mart. That's second to the 55 percent who intend to switch to Best Buy, but it seemingly establishes Wal-Mart as a logical alternative to Best Buy.
Wal-Mart is taking the ball and running with it, according to a Wall Street Journal report. The report refers to Wal-Mart ratcheting up its electronics, a category it credits with a market-leading 5.1 percent rise in same-store sales in February.
The WSJ report also indicates that Wal-Mart intends to battle Best Buy on price. In response, Best Buy intends not to fight that fight. Instead, it plans to ramp up its show experience by emphasizing interactive product demonstrations.
Best Buy's current ad campaign features sales associates talking about problems they solved for customers, perhaps suggesting that box-mover Wal-Mart isn't likely to come up similar solutions.
It's funny how things change.
It used to be Tweeter trying to avoid a price battle with Best Buy, instead focusing on its sales staff's product knowledge and lifestyle-themed stores.
Circuit City also aimed to position itself as more of a solution provider than a product seller, using tag lines like "Just What I Needed."
Perhaps Best Buy learned some lessons from its competition.
Several former Tweeter executives say Tweeter did try to compete on price with Best Buy. That departure from its core philosophy was among the reasons for Tweeter's downfall.
Circuit City's failure can't be blamed on any one thing either, but Jim Ristow of Home Entertainment Source recently suggested that Circuit City didn't do a good enough job differentiating itself from Best Buy. "You can't out-Best Buy Best Buy," he said.
It appears that Best Buy isn't going to try to out Wal-Mart Wal-Mart.
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About the Author
Tom LeBlanc, Senior Writer/Technology Editor, CE Pro
Tom has been covering consumer electronics for six years. Before that, he wrote for the sports department of the Boston Herald. Migrating to magazines, he was a staff editor for a golf publication and an outdoor sports publication. Now, as senior writer/technology editor of CE Pro magazine since 2003, he dabbles in all departments and offers expertise in marketing. Follow him on Twitter @leblanctom.
2 Comments (displayed in order by date/time)
The scenario in USNY. Customer at that level will spend as much time as they can with sales associate and observing demos, then will sort out the least expensive source for purchase.
Page 1 of 1 comment pages
Last Saturday I went to Best Buy to find a good set of headphones or earplugs to go with my iPhone. I found a $99 in ear set w/ mic and a $149 noise canceling over ear type.
Although there were two or three guys in blue shirts that came by to ask if I was finding everything OK, none of them could help me with my basic request: Do these headphones sound good, and can I try them?
The answer was I don’t know, and no I can’t try them. Basically I was instructed to return them if they weren’t any good.
So in my opinion, Best Buy does nothing to add any value over a web based price slasher. In fact, while standing in the store, I went to amazon (using my iPhone) and read some reviews that actually pretty helpful and informative.
Now that customer service has been driven out of all of retail, what is left? Consumers can find better information and better prices on the internet.
So my advice to Best Buy is if they are going to specialized in something, it should be product knowledge beyond what is already written on the box (and sometimes even that is lacking).