HBR | Maxwell Wessel | Best Buy Can't Match Amazon's Prices, and Shouldn't TryThis seems like the opposite of a good idea.
To survive their disruption, Best Buy should be looking for opportunities to optimize their business model around the jobs that Amazon can't do for customers. Maybe, for example, Best Buy could offer exclusive products for the customer who fears buying a product without seeing it in person. Customers with this job-to-be-done would happily pay a premium to buy a product they saw in person if it weren't available through online retailers for less. For instance, Best Buy could be the perfect home for retail distribution of products launched and funded through Kickstarter, which has seen 2012 as the year of the crowdfunded consumer electronics.
(1) Kickstarter, almost by definition, will be turning out products that have appealed to people who are comfortable online. These are not the people who want to drive to a store to check out products.
(2) Kickstarter projects can not, by their very nature, afford to build tons of inventory to have it sitting in show rooms.
(3) Kickstarter projects, again by nature, are niche goods. If they were mass market they wouldn't need crowd-funding.
It could offer incredible on-site service that required customers to have purchased at a premium at a Best Buy (in the same way customers flock to the Apple's Genius Bar for help when the littlest thing goes wrong with their hardware).We've just come through one of those annual blogo-storms about "Why can't Walmart be more like CostCo?" and once again the answer is "because they're different companies, and it is extremely difficult to change corporate DNA that much." Why can't Best Buy have incredible on-site service?" is about as sensible as "Why can't Chrysler make a Camry?" Perhaps I'm being fatalist, but that's just not what they do.
It could even focus more of its operations on the last-minute needs customers have for which no delivery network is fast enough, growing its automatic kiosk network.Amazon already has same day delivery trials underway. Who has the kind of life where they can't wait 24 hours for electronics? Or, how many people would rather spend 45 running an errand than wait for a next-day shipment? (Answer: people with little employment, and little expendable income.)
Even if this kiosk business worked, why would Best Buy be particularly good at it? Why should an investor give $$$ to Best Buy to build out a network of kiosks when they could give those same dollars to Amazon or Red Box or New Egg or some start-up or WaWa or Aramark Vending or literally anyone else to do the same thing?
PS I realize I'm being a little hard on the HBR bloggers lately who have been posting "Best Buy, etc. could do X to survive" ideas. I think Best Buy is pretty well doomed, if not to bankruptcy than to market irrelevance. This makes it easier for me to say "no, that won't work; no, not that either." If I had to go to work for Best Buy as a consultant I couldn't really say "you're screwed, fold up shop now." I'd be stuck trying to pitch long-shot ideas about Kickstarter and kiosks, like these HBR bloggers.