Best Buy’s decision this week to close its 11 ‘big box’ out of town electronic retail superstores has not come as much of a surprise to the industry. The writing has been on the wall ever since the ambitious rollout programme of 200 stores ground to a halt with just 11 openings and heavy first year losses were announced.
Even without the benefit of hindsight, many queried the move at the time. The timing, in the middle of a recession with the sale of electronic goods in a slump, was appalling. And in between announcing the plan and opening the first store, rival DSGi had pulled itself together, closing Dixons and creating Currys/PC World megastores, while it set about improving its customer service record.
Best Buy, while highly successful in the US, just isn’t known in the UK. It needed a massive marketing push to raise brand awareness among British consumers. But after the initial fanfare of the first store opening in Thurrock, there was an uneasy feeling that the management was less than wholeheartedly behind it. ‘They got the jitters,’ as one source told Mobile.
Marketing was largely confined to local print and social media, when a national awareness campaign was needed to persuade people to make the trip to an out of town store. The problem was the number of stores didn’t justify a national campaign, leaving Best Buy in a Catch-22 situation.
The 50:50 joint management between Best Buy and Carphone didn’t seem to help matters either, making for unwieldy decision making. The initial US Best Buy top team disappeared back to the States with remarkable haste, either because they didn’t have enough to do once the store programme halted, or because the joint structure was proving difficult.
Carphone has now sorted out the joint management difficulty by exiting the US for a tidy sum and putting itself back in the driving seat in Europe, despite Best Buy still owning 50% of it.
Carphone is very good at selling mobile phones. It is not an expert at selling electronic products, Wireless World stores notwithstanding. The good news from this debacle is that it can now concentrate on doing what it does best.