Shopping has become a part of everyday life for most Americans. Large retail outlets line major roads of American cities and towns, enticing customers with compelling advertisements for products that differ from everyday necessities, to flashy toys which promise hours of entertainment. While many stores carry these entertainment products, like TV’s, computers, gaming systems, and audio players, there exists one company that stands higher than the rest as the “dominant technology and entertainment retailer” (taitsubler.com) in the usa – Best Buy.
With a gross income of over $50 Billion in fiscal year 2011, and a net income of $1.227 billion, Best Buy Co., Inc holds among the largest market shares in the consumer electronics industry, as they should. Best Buy, founded in 1966, is electronics merchant, whose stores are chock filled with expensive electrical toys and tools. Stores are divided into departments, each department specializing in a kind of technology. Each store includes a Home Cinema, Computer/Tablet, MP3/iPod, Gaming, Digital Imaging, Car Electronics, Music/Movies, Appliances, and Mobile (cellular phone) department, where products along with their accessories are saved to display.
Best Buy, striving as a one stop go shopping for customers, offers services to go along with their products. Through partnerships with companies like Comcast, Dish Network, Time Warner, and Clear Wireless, customers can leave the Best Buy opening times with connections to the internet, cable or dish TV, and phone services. Through the acquisition of Geek Squad in 2002, Best Buy can also be able to offer repair and installation services on most of its wares, including TV’s, computers, and appliances. In reality, Best Buy now brands most of its warranties and installation services with all the Geek Squad name, and encourages customers to make use of their in-store service counters, where they are able to talk one on one with a Geek Squad agent regarding the issues they are experiencing using their technology.
Geek Squad is not really the sole brand to become owned by Best Buy. Product brands like Dynex, Insignia, and Rocketfish are common owned by Best Buy. These brands are mostly manufacturers of product accessories like wireless mice (for computers), speakers, cables and cases, but both Dynex and Insignia are manufacturers of larger products, like TV’s. Having “house brands” is beneficial for the company simply because they lead to higher margins on those products, and greatest Buy has greater power over product inventory levels and greater flexibility in the creation of new items to fit with market trends. For instance, Best Buy was able to respond to the production in the IPad by creating several IPad accessories, such as cases and stands, through its brand Rocketfish. Not just did consumers benefit having a greater variety of accessories to pick from, but additionally through the lower prices that arose due to competition inside the accessories market.
Other brands connected with Best Buy are Magnolia, a branch of the Home Theater department, where high end TV’s and speakers are sold, for those customers that desire above average performance from their TV’s and speaker set-ups, and Napster, which, up to earlier this year, was an attempt by Best Buy to get in the tunes streaming and download market. (Napster was recently sold to Rhapsody for an undisclosed amount.)
Best Buy has already established increasing difficulty with domestic expansion too, facing stiff competition off their retailers, like Wal-Mart and Target, that have recently put forth efforts to grow their electronics selections at increasingly huge discounts, as well as from online stores such as Amazon.com and Newegg.com, who can offer large selections exceedingly less expensive costs because of the low overhead. Best Buy stores have been called “Amazon’s showcase” by consumers who utilize the blue and yellow retailer as being a ueukql to find out and understand products in close proximity before ordering them from another company online.
Ex Best Buy CEO, Brian Dunn, however, comes with an optimistic look at his company’s strategy for rivaling these other businesses. Bestbuy.com is better Buy’s answer to online competitors, and contains been called “extremely successful” by Dunn. In addition, it posseses an edge over Amazon and Newegg; the products ordered from Bestbuy.com may be found available, which eliminates the cost of shipping. 40% of online orders are acquired in store, according to the article Best Buy Gets Squeezed which ensures that consumers do enjoy possessing this option available to them. Furthermore, items ordered online may be returned to traditional locations, which consumers find convenient and reassuring. “In the future, physical stores alone will not be enough. Digital alone is definitely not enough. How they get together is the thing that really matters,” says Dunn (Best Buy Struggles with Global Ambitions).