Best Buy Lost in the Amazon Jungle

I used to go to Best Buy for all my electronic needs. Video cameras, batteries, plasma TV's, electric shavers, you name it, there I bought it. Convenient, quick, ready to use.
Then last year my computer died. During this tragic time, I needed to remove its memories before laying it to rest in the electronics graveyard, a few months worth of data I hadn't backed up. Best Buy to the rescue-
Hard drive enclosure needed- $65 ... ? No experience to back my intuition up, but that seems a little steep, doesn't it? Well I need it right, what choice do I have, here's my credit card. 
Back home I check the price of the item on Amazon. $5! What?! 
I call my techie friend, expecting him to treat my $5 sighting like I was claiming I had just spotted the Loch Ness Monster. Instead the response comes loudly into my cell phone receiver, "Don't tell me you just spent $65 on a hard drive enclosure?!"
(Hiding the evidence behind my back) "No."
And with that, I placed my order on Amazon, and returned to "Best Buy" to make a final return, spitting at their disingenuous trademark as I exit the store. 
You see, as a consumer, I'm willing to pay a little more for the convenience of being able to bring my home my purchase, what I don't like is being treated as a sucker, and offering me the same product for thirteen times more qualifies.
Best Buy- aerial photo as the Amazon envelops it
When shopping at Amazon, I'm instantly shown several different competing bids, so I can be certain I'm not going to be paying rip-off prices.
I worried about customer service, books come as are, no worries there, but my concerns were allayed when I ordered some voice recognition software from an Amazon associate, which didn't even successfully load onto my computer. I was able to return it for a full refund; Best Buy doesn't let you return software. 
From all my encounters, Amazon seemed to bend over backwards to ensure my experience was a good one. Obviously they understand the value of retaining loyal customers. Not that my experiences at Best Buy were awful, but I felt to ensure good service I should always spend a little time building rapport with the representive with whom I was dealing with; at Amazon, I just describe what happened (on the rare occurrence that it does) in an email, and it gets taken care of.  
Now with Amazon instituting Amazon Prime, I get my order in two days, and I don't have to pay the 10% California sales tax. (An incredibly unfair advantage for Amazon, but one that nonetheless has existed for 15 + years)  
Speaking of Prime, in addition to the shorter wait times, it comes with free video streaming. I'm not ready to say it should replace Netflix for you, Amazon's library is not nearly strong enough, but unlike Netflix which I cancelled recently, at least Prime videos function properly on my PC, unlike Netflix videos, which after a few minutes are using 100% of my CPU- Crash. 
If  Amazon  were to spruce their library up, I'd pay the Prime fee for the videos alone, and the rapid free shipping would be merely a huge bonus. 

Not only are online retailers are more efficient, lacking costly physical locations, enabling better prices, but the specialty stores that exist in the physical world sell the identical products Best Buy does, except with a superior experience. 
All the traffic that Best Buy used to receive whenever some "must have" tech product came out, be that the original IPhone or Halo, today it's simply more fun to line line up at the Apple store, with all the other Apple Geeks, and buy it from the sleek well managed "Altar of Jobs" with the Genius Bar. Personally, I'll just buy it online, thank you very much. 
Malls all over America are seeing a decline in occupancy due to online retail. I no longer shop at Best Buy, and I used to be an excellent customer, my friends as well. 
Tomorrow's show room will be internet video of the product, and your trusted representative will be other users who've left product ratings. It's already happening. 
Does that mean you should buy Amazon? I love the company, I use them, but the stock trades at 130 times earnings. No matter how much Amazon innovates, or scale with which they can expand, or their formidable business moat, I just cannot pull the trigger here, the price is too high.
Netflix- likely to be swallowed by someone, at a price, but there is no real moat for stand alone streaming film, and as the river they call Amazon Video gathers speed, Netflix will likely succumb to the pressure and be washed away (though their assets still have value)
Best Buy, has recently followed the market up, a rising tide raising even this leaky ship, a company that has seen a steady erosion in sales, and in a recent quarter where their goal was set to regain lost market share, their margins dropped precipitously, and profit fell nearly 30%. 
Yeah, sure Best Buy has an online store, but since the experience can be viewed "side by side" with Amazon, I'll leave you to decide which browser to close. 
In 5 years best Buy either won't exist, or it will be a shell of its former self. The big box physical retailer is going the way of the dodo bird, with Circuit City and The Good Guys gone, Best Buy is next. It's a trend that's nearly impossible to stop, albeit with slightly more resistance than what happened to record stores.
Best Buy crashed into the Amazon jungle, and they aren't making it out alive. Short Best Buy, it'll be the best sale you've ever made. 

Comments

  1. I love Amazon also! Service of high quality!
    Yes, PE is high and I am not sure whether it is expensive or not, just that something I can't understand without having more solid data (like how much extra investment each year for those loss making businesses)...

    ReplyDelete
  2. Amazon has reinvested much of their profits into their business. A sign that they believe growth remains, and i like that. Still, it is PRICEY!

    ReplyDelete

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