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Daily Dose of iQ: Electronic Stores in the U.S. are Fighting to Survive
With the increasing popularity and convenience of online shopping, it’s no surprise that electronics stores in the U.S. are fighting to survive. Ann Zimmerman of Wall Street Journal wrote, “Not long ago, retailers such as Best Buy, GameStop and RadioShack Corp. were out muscling competitors across America by offering one-stop shopping for the latest televisions, computers, videogames and gadgets. Now all three are fighting to survive. The rise of online competitors like Amazon.com Inc. that offer low prices and downloadable products have siphoned customers and sales from these once-powerful retailers.”
According to the Wall Street Journal, Best Buy recently reported profit fell 91% last quarter on the eighth sales decline in nine quarters at stores open at least 14 months. Its founder is trying to take it private. RadioShack suspended its dividend last month after posting its largest quarterly loss since 1996. GameStop's profit fell 33% last quarter due to declining sales of game discs and consoles.
“The retail chains are responding with turnaround strategies that highlight their abilities to obtain hot new smartphones and tablets, and are trying to capture those purchases that consumers still prefer to make in person," Zimmerman wrote.
“GameStop, which has 6,600 U.S. stores, is adding used iPhones and tablets to its portfolio of new and used videogames. It is also beefing up its digital download services to compete against game websites like Valve Corp.'s popular site, Steam. RadioShack, whose stock is down 75% this year, is playing down cables and connectors and refashioning itself as a convenience store for smartphone buyers. And Best Buy is shrinking its fleet of big-box stores, pushing high-end appliances and retraining workers to focus on tech support. It also is opening hundreds of small stores devoted to mobile phones and tablets.”
In the new landscape of omnichannel retail, with online and mobile shopping apps and technology growing at a rapid pace, brick-and-mortar retailers large and small will have to continuously evaluate and refine their business models to accommodate consumer’s changing demands and expectations of what an in-store experience should provide. Most consumers still prefer to purchase items like smartphones in-store so retailers need to take advantage of this and focus on the in-store experience offered while also considering how to provide an optimal experience across their online and mobile channels.