Shopping has turned into a part of everyday life for many Americans. Large retail outlets line major roads of American cities and towns, enticing consumers with compelling advertisements for products which vary from everyday necessities, to flashy toys that promise hours of entertainment. While many stores carry these entertainment products, like TV’s, computers, gaming systems, and audio players, there is certainly one company that stands above the rest as the “dominant technology and entertainment retailer” (taitsubler.com) in america – Best Buy.
With a gross income well over $50 Billion in fiscal year 2011, as well as a net income of $1.227 billion, Best Buy Co., Inc holds one of many largest market shares within the consumer electronics industry, since 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 type of technology. Each store includes a Home Theatre, Computer/Tablet, MP3/iPod, Gaming, Digital Imaging, Car Electronics, Music/Movies, Appliances, and Mobile (cell phone) department, by which products as well as their accessories are on display.
Best Buy, striving to be a one-stop look for customers, also provides services to visit with their products. Through partnerships with companies such as Comcast, Dish Network, Time Warner, and Clear Wireless, customers can leave the Best Buy hours of operation 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 in a position to offer repair and installation services on a lot of its wares, like TV’s, computers, and appliances. Actually, Best Buy now brands all of its warranties and installation services using the Geek Squad name, and encourages customers to make use of their in-store service counters, where they can talk face to face using a Geek Squad agent concerning the issues they are experiencing with their technology.
Geek Squad is not really the only brand to be properties of Best Buy. Product brands like Dynex, Insignia, and Rocketfish are common belonging to Best Buy. These brands are mostly manufacturers of product accessories including 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 because they result in higher margins on those products, and finest Buy has greater control over product inventory levels and greater flexibility in the development of new releases to match with market trends. For example, Best Buy managed to react to the production from the IPad by creating several IPad accessories, including cases and stands, through its brand Rocketfish. Not merely did consumers benefit having a greater assortment of accessories to select from, but also from the less expensive costs that arose due to competition within the accessories market.
Other brands connected with Best Buy are Magnolia, a branch of the property Theater department, by which more expensive TV’s and speakers can be bought, for all those customers that desire above average performance using their TV’s and speaker set-ups, and Napster, which, up to earlier this coming year, was an effort by Best Buy to get into the songs streaming and download market. (Napster was recently sold to Rhapsody for an undisclosed amount.)
Best Buy has experienced increasing difficulty with domestic expansion as well, facing stiff competition from other retailers, like Wal-Mart and Target, that have recently put forth efforts to expand their electronics selections at increasingly competitive prices, and also from online stores including Amazon.com and Newegg.com, who have the ability to offer large selections exceedingly less expensive costs because of the low overhead. Best Buy stores have already been called “Amazon’s showcase” by consumers who utilize the blue and yellow retailer being a ueukql to find out and learn about products close up before ordering them from another company online.
Ex Best Buy CEO, Brian Dunn, however, comes with an optimistic view of his company’s strategy for competing with these other businesses. Bestbuy.com is most beneficial Buy’s solution to online competitors, and has been called “extremely successful” by Dunn. Additionally, it comes with an edge on Amazon and Newegg; the merchandise ordered from Bestbuy.com may be found available, which eliminates the price of shipping. 40% of online orders are acquired in store, based on the article Best Buy Gets Squeezed which suggests that consumers do enjoy possessing this option accessible to them. Furthermore, items ordered online can be returned to brick and mortar locations, which consumers find convenient and reassuring. “In the future, physical stores alone is definitely not enough. Digital alone will not be enough. The way that they get together is exactly what really matters,” says Dunn (Best Buy Struggles with Global Ambitions).