Close the Big-Box Stores, Already

April 22, 2011

11:20 am

The year is 2012. You walk into a Sears for a new washer and dryer or Best Buy for a new television. Let’s say you are not inclined to search the Internet to identify a product line you feel comfortable with, as well as a subsequent location to purchase it, all prior to walking into a physical store. I would argue that most Americans research every purchase over $100 today, but I couldn’t pull up any good research to reference, so let’s ignore it for now.

So you haven’t researched your purchase ahead of time, and you find the washer, television, jewelry, what have you…..You find the one that you want.

Now, you pull your phone out and type the make and model into it. A list of sources to purchase the product, relevant to your location, comes up in seconds. Not a stretch from a technology standpoint, I am sure you’ll agree. Inside the next 18 months, the majority of Americans will have Internet on our phones. Even if you disagree, call it two or three years   Eventually our cell phones will become our primary Internet devices, and you are going to check price every time. It’s too easy. We’ll have to check if all it takes is a few punched keys. We’d be crazy not to.

How does a big-box retailer compete on price with all that overhead? They don’t.

Those who are currently profiting from these big-box retailers’ existence will likely argue that their service, convenience or quick delivery and installation will save them. I disagree. Like it or not, with the exception of a few verticals like small consumer goods, convenience stores and dining, the Internet changes industries in such a way that they need to rethink their business models completely.

What does a Best Buy look like in five years?

It probably looks like the gaming retailer, EB Games does today–small locations within shopping plaza’s and malls, staffed with fervent advocates who work and play with the local community to buy, sell and trade goods. It looks like MAC, which positions itself wisely as an advocate for beauty with salon-type locations where women can get their makeup done and talk about the latest trends.

In the consumer electronics world, nobody is doing this better then Apple–beautiful stores inspired by their products’ design, staffed by fellow Apple enthusiasts, backed up by the advertising budget you only find in the world of autos, insurance and pharmaceuticals today.

This is the optimal Best Buy is in my opinion:

  1. 1500 +/- square foot locations across the US in major markets.
  2. Staff with stand up terminals to their website and well informed electronics advocates along with a member of the Geek Squad for tech support.
  3. Large screens on the wall to demo what product is at the terminal at that time, showcasing to passers-by what their neighbors are about to buy.
  4. Holding regular events with the involvement of the local community to showcase the cool ways the products they represent are being used–things like music mash-ups, short films, photography lessons, etc.
  5. Back up your locations with aggressive brand advertising focused on your website and positioning your store as a local resource–like libraries were for books, they’ll be for consumer electronics.
  6. Invest in super-efficient distribution. Position your stock warehouses strategically across the US like Amazon does to ensure quick delivery and put money into customer service like Zappos.

The recently bankrupt Circuit City had the right idea with the last ditch attempt at changing their model to “The City”. The only problem:  Too much overhead to sustain the transformation and realize any measured results to present to stockholders. Plus, they laid off all their seasoned workers to cut costs, but that’s another issue.

Big-box retailers like Best Buy should start today with a kind of “Best Buy Express”. Take any/all of the stores you have planned and scrap them. I fully understand the power of big, beautiful stores over consumers and their ability to force out local retailers, but this model is simply not sustainable, the more and more of our lives we spend online. Don’t make the mistake Blockbuster did and wait until somebody has figured this out and is forcing you to change, as it was with Netflix. Blockbuster had a legitimately better offering in that they allow you to return DVD’s to the store or by mail and pick up them up in the store without an additional charge. They had the market exposure and the ability to produce the better product. They saw Netflix as a fly not worth swatting, and now they are all but dead.

Image by Flickr member Tom Raftery

Guest writer Jason Lorimer is a Fellow Entrepreneur @CulturaHQ, advocating on behalf of those with the ambition to do more than just entertain ideas. He builds things armed with an insatiable curiosity and a healthy dose of impatience. Developing socially integrated platforms where people can participate and add their own value to their experience, Jason and his team transform pre-internet business models into post-internet companies that scale. At the office, when he is not working with partners to incubate their early stage ventures, he posts on his blog and loves kicking around ideas with other entrepreneurs from around the world. Occasionally disconnected from the world wide web, Jason is a music lover and amateur artist with several creative outlets including photography and painting. You can find Jason on Twitter: @CulturaHQ

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Jason Lorimer is a strategist and fellow entrepreneur @Entrepreneurs (, where he works to advocate and execute on behalf of those with the ambition to do more than just entertain ideas. Jason and his team transform pre-internet business models into post-internet companies and prepare them to scale. Most recently Jason has set out to help cultivate industrial age cities into start up hubs. You can follow him @JasonLorimer

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