As 94 year-old electronic retail chain RadioShack continues to go through a drastically restricting 3 month period after filing for bankruptcy, many observers are busy predicting a similar fate for other big electronic retailers like Best Buy. This is all due to the age of online marketing.
Until now, Richard Schulze’s Best Buy has managed to defy the trend and adapt its business model to the changing times. With online retailing giants like Amazon dominating the electronic retail segment, Best Buy has come up with new strategies to retain its loyal customer base.
The center piece of Best Buy’s strategy is the “price match guarantee” which matches the prices of its products by with the lowest ones available online. By doing so, the retailer has been able to capture customers who otherwise would have simply visited its stores to browse electronic products and ordered them later online.
But unlike Amazon, Best Buy still has to pay all of those people who work in its stores and the overhead of rent and electricity, etc.
So this strategy comes with a cost and puts the retail store margins under pressure, forcing the company to restructure its business operations.
Furthermore, Best Buy has been able to motivate customers to visit its stores with campaigns and advertising strategies, the way RadioShack and other rival chains could not.
Again, this is an expense that Amazon does not have.
Despite the tough road ahead, it would be too early to write off electronic retail chains; not even RadioShack, which came back from the dead.
Some of its retail stores will survive under the new arrangement. The retail format will be reorganized and the stores will share space with wireless carrier Sprint.
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