Best Buy: Can stores be asset vs. Amazon?
The advantages to the store-as-fulfillment center plan are that Best Buy can deliver products faster and cheaply. The downside to that strategy is that Best Buy’s in-store inventory visibility isn’t good and the staff may not be as efficient as people in a distribution center.
The conventional wisdom would say that Best Buy’s stores are an albatross around their neck — much like they were for Blockbuster. But what if they can shift them into being more along the lines of warehouses — much like the ones Amazon is trying to build as quickly as possible — for fast local delivery? And what if only a small area of those warehouses were actually a storefront to show off their goods?
This would all take a lot of logistics (and possibly some re-zoning?) but it doesn’t sound like the craziest idea in the world. Again, what if your weakness is actually your strength?
Sounds like Joly might be onto something. But he can forget the ‘Microsoft Experience Stores’.
This is a wise move.
Amazon has 75 fulfillment centers globally.
Best Buy has 1150 stores globally.
Once you remove the dead space in the stores (all optical media), reallocate space for fulfillment, outfit the stores with a trucking fleet, push the “showrooming” experience (replete with apps, etc.), and convert from a sales culture to an inventory management one, I believe same day delivery is very possible for Best Buy for certain items.
Besides, if the strategy fails, there will be a few companies looking to pick up those bricks and clicks assets in a fire sale.
Disclaimer: I consulted for Best Buy in 2011.
I think the brand is toxic and no amount of reorganization can fix that (just like Blockbuster). The only tiqme I would ever go to a Best Buy is when I needed something electronic RIGHT NOW and, if memory serves, half of those instances involved not finding what I needed and the other half involved unknowledgeable and unmotivated staff.
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