CBC has a story on the changing landscape that Best Buy and Future Shop is facing today
Brick-and-mortar outlets “have become less relevant,” he said, and as a result “the handwriting’s on the wall” when it comes to selling electronics in a big-box format.
Another factor is that electronics are being “downsized” as technology advances, making it less necessary to maintain huge stores, and cheaper for retailers to sell goods online and ship them to customers, Williams said.
While a big box is good for things like television, there really isn’t an advantage when it comes to other items. The Source is every bit as compitive on a lot of items. Even today I went to Best Buy and then actually found what I was looking for at The Source for a lower price. That happens quite a bit. It’s especially a big deal with The Source having locations all over the city. I often find it really easy to wander in and find what I am looking for on a break or while I am out and about.
The other issue is especially with Apple products is that I can buy direct from Apple and if it is over $50, I get free shipping and I don’t have to pay tax. I am looking at replacing my iPod with a new iPod Nano and it’s cheaper to buy direct from Apple than it is from anywhere in the city. The same thing when I buy from MEC. Expect others like Microsoft and even brands like Dr. Dre to do the same thing. Even if they don’t, shopping from Amazon is so easy and with Amazon’s low margins, it’s almost the same thing for an established brand.
In the end the big box stores use the format to compete on price and if they can’t compete on price, they bring very little else to the table (unless they can create an in-store experience like Cabelas) As online retail continues to grow, look for smaller stores with better customer service, and easy access to make a comeback. It isn’t just electronics. Stores like Rona are asking the same questions about how easy is it to compete with Home Depot and Lowes on a large scale when they may have the supply chain efficiencies and infrastructure to do it.
The other part of the retail discussion is Sears laying off 700 people in Canada. I wasn’t surprised. Several times I have been the only customer I could see in a Sears store and when I walk through it I have to dodge rack after rack of discounted goods. While The Bay has rallied around the voice and leadership of Bonnie Brooks, Sears seems to just be drifting with empty stores, an aging demographic, and no real leadership. I can’t see them being around in five years time.
My brother Lee gave Mark a Nintendo DS for Christmas. Mark had been working for me at the Centre helping with some odd jobs and had amassed some cash to save up for a DS (what a coincidence!). With his DS taken care of and a glut of cash, he wanted to go out an buy Mario Party DS. He has played it on the Wii at Lee’s place and on Christmas Eve, they were up late playing it so I knew what we were doing on Boxing Day.
We went to my top secret parking spot at Midtown Mall and ran into EB Games. There were over 100 people lined up to get into the store. I didn’t even entertain going in there and while Mark was sad, I promised we would check out some other places. Wal-Mart was totally out of PSP games and almost out of Nintendo DS games and of course there was no Mario Party games. We checked out another Wal-Mart and no luck there either. As we were heading over to Lee’s last night, we went by Future Shop and to our shock, they had a copy that I grabbed for Mark.
After looking at DSLR’s and some other cameras (a Fujifilm S2000hd), we got into line. Mike O left a great comment that mentioned the same experience in Fry’s a couple of years ago but with only one long line and multiple tills, the line moved briskly. I don’t know if it is the season or if Future Shop does something right but it was the friendliest line I have ever seen. The mother in front of us had gotten a DS as well from her teenage kids while some university students behind us were buying Guitar Hero World Tour. Within a couple of minutes all of us were talking about technology and our purchases. One of the guys was giving Mark Mario Party DS tips while another guy was rifling through the Coke machine to make sure all of our drinks were cold.
Over the years there have been a lot of studies about how one line and many checkouts is quicker. Of course many places don’t do this because psychologically people think many short lines is quicker. My own experience is that in a longer line like at Future Shop, people are just resigned to waiting for a while and end up making the best of it by chatting with each other. We were in line for only a couple of minutes but in the end all of us were in a lot better mood by the time we got to the tills and while the Future Shop employees were extremely pleasant, it had to make it easier on them when customers are in a good mood.
I know why stores like Safeway and Home Depot do it the other way but if Future Shop had that system, I doubt I would have even gone into the store if it was that busy.