Recent news and opinion is pointing to death by size for big box names across the nation. All of them appear to suffering from an unsustainable margin model that does more to drive down profit than sell product. Consumer Electronics big box stores are reeling from their own success stories of selling more than everyone else. Is there a lesson to be learned or just another example of the natural order of selection? Being hailed as the top product movement channel appears to come with a strange side effect, shrinking profitability and less customer traffic. How long can any retailer last selling high-demand products at low or oft, negative margins? Regardless of the reason, the writing has appeared on the preverbal wall.
So I am wondering, what does this do for or to the specialty retailer? It's not like the specialty retailer model is free from problems. Mobile electronics retailers are challenged with awareness of our category and the consumer's desire to purchase the same product at the lowest price. Let's face it, it's tough to succeed with traditional brink and mortar when consumers have access to information and products on the internet. But back to the big box, will the reduction in the national footprint of companies like Best Buy and Sears have any positive effect? Has the death of stalwarts like Circuit City and Tweeter provided growth opportunities for the specialty channel or just pushed consumers to shop more on the internet possibly fearing that any brick and mortar could suffer the same fate? We may not have the answers today, but it is clear that a fundamental change in the structure of traditional consumer electronics retailer is afoot.
So what type of consumer electronics retailer is seeing success? Smaller, more customer service centric stores. I hate to state the obvious but stores like Apple are crowded with shoppers. In many cases, shoppers that made an appointment just to speak with a sales associate. Apple is the epitome of a successful specialty retailer. Their focus in on demonstration of technology solutions and teaching consumers about the products makes for a model that I dare say is what most specialty retailers aspire to be.
As we watch the slow death of the big box model, take heart, as there is hope that consumers will desire what we all know is the best experience; your local store!