Revitalizing Brick & Mortar Stores to Compete Against Online Retailers

Revitalizing Brick & Mortar Stores to Compete Against Online Retailers

EXECUTIVE SUMMARY

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While Best Buy is the world’s largest multi-channel consumer electronics retailer, for the past few years, Best Buy’s performance and reputation has been on a consistent decline, due to the ever changing market situation. Even though Best Buy has been adopting more consumer-friendly policies like price matching and 30-day returns, it is still failing in other key segments of the market because there isn’t enough significant change in the Best Buy business model to adjust. It is of utmost importance that Best Buy addresses the threat of online retailers. Consumers are becoming more likely to shop online rather than in brick and mortar stores. In order to protect the livelihoods of its physical stores, Best Buy must encourage consumers to shop in person rather than online. Best Buy can reach this goal by focusing on shopping experience and consumer incentives. We propose the implementation of a two part plan that focuses on store improvement and compacting locations. Store improvement has three major components, marketing, in-store experience, and relationship building. Compacting locations aims to close struggling locations, open Best Buy Mobile stores, and offer shopper assistance.
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INTRODUCTION The purpose of this memorandum is to inform you of our analysis of Best Buy. We will do so by presenting the findings of our internal and external analyses, an overview of our proposed solutions for in-store improvements and compacting locations, the issues with implementations and our solutions for such issues. In the past, Best Buy has been considered the largest consumer electronics retailer with a reputation for excellent customer satisfaction. However, the main issue Best Buy is now facing is how the sales of their brick-and-mortar stores in the U.S. are losing to those of the present online options, such as the online presence of their competitors like Amazon, eBay, and Newegg. Our recommendations will focus mainly on incentivizing consumers to want to go to the physical stores themselves to shop, rather than buying online. SUMMARIZED FINDINGS Overview From our various analyses, we have concluded the following regarding the success of Best Buy:  The Industry’s key success factors that require immediate attention are market proximity, stock control, experienced workforce, product presentation, and supplier relationships  The competitor analysis suggests that Best Buy focus on competing with online competitors rather than other brick-and-mortar stores  Porter’s 5 forces was deemed high, with Best Buy the ultimate company within the brick and mortar consumer electronics industry. Therefore, Best Buy must start to take customers from online stores.
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 PEST Framework suggest the increase in GDP per capita income will increase discretionary spending in the Consumer Electronic industry.  Given the VRIO analysis, Best Buy should focus on Geek Squad and th