You may have already heard that Circuit City is being liquidated. This event was just waiting to happen for some time. (By the way, don’t bother going to a Circuit City thinking you’ll find a good deal. The prices are still beyond outrageous. At this point, everything in the store was marked up to full price retail, and a measly 10% “discount” is applied. Online and many other retailers are still cheaper, and you still can return the item.)

Now with Circuit City out of the way, the only major electronics retailer on a National perspective is Best Buy. I have a feeling that Best Buy will be next as they will try to take advantage of the Circuit City situation and not learn from the mistakes haunting retail.

Best Buy really has two options here, and I don’t think they will make the right call.

Option 1 would to take advantage of their semi-monopolized market share and jack up prices to the already over priced retail merchandise. In many regions, they will be the only game in town in as a full blown electronics store. Fry’s might force competition in some markets. The Big Box Stores like Wal-Mart can only compete so much as selection and higher quality items are lacking. So, Best Buy can either keep their current business model, or jack up prices. If they go down this path, they will also be out of business or severely hurting like many brick and mortar retailers.

Option 2(The Right One) is to catch up and compete with on-line retailers. Best Buy(along with every other retail chain) needs to open their eyes and face the reality of the shopper of the Internet age. People want the best product at the best possible price. If Best Buy doesn’t turn around their business model to directly compete with Frys (Mostly the On-line Store), Buy.com, Amazon.com, TigerDirect, and many other online retailers, they will also be in liquidation overnight like Circuit City. Especially now in these economic times, the smart consumer (those with money still) is frugal and will save every dollar they can. For years myself and many others walk into a Best Buy and see something needed or wanted, but realize that Best Buy is extremely over-priced.

In addition to online shops cutting prices sometimes more than 50% to the brick and mortar, online forums like SlickDeals and AnandTech make deal finding for online and retail shoppers very easy, and in most times exciting just trying to find unbeatable deals.

So Best Buy, the future of the brick and mortar industry lies in your hands. Darwinism argues that evolution is based on survival of the fittest. As it appears right now, if retail stays on the same path, all species of retail will go the day of the Dinosaur and Circuit City. All that will remain is grocery stores and so called liquidation sales.

This entry was posted on Saturday, January 17th, 2009 at 10:15 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.