Beyond the Clouds
According to last year’s headlines, Best Buy was supposed to be dead by now. “5 Reasons Best Buy’s 5-Point Plan Will Fail” proclaimed Motley Fool. “Best Buy: Is This the Last Public Gasp?” queried Forbes.
Yet quite the opposite happened. Strengthened by CEO Hubert Joly’s cost-cutting “Renew Blue” initiatives, Best Buy steamrolled into the 2013 holiday selling season, matching online prices for select products, offering new Samsung Experience and Microsoft stores, while promoting the heck out of new products such as the PlayStation 4, Xbox One and the $99.99 Shine fitness monitor. Best Buy stock prices rebounded from a low of $11.20 on Nov. 21, 2012, to $44.06 in Nov. 5, 2013.
So CE dealers will enter 2014 with their biggest competitor re-invigorated, Amazon.com still aggressive but hardly profitable, Walmart still Walmart, Kmart/Sears still struggling, Office Depot buying Office Max, and Lowes and Home Depot continuing to take appliance pricing potshots at each other.
Some regional players continue to expand geographically (Conn’s and Paul’s TV) and in product categories (Starpower’s new showroom includes high-end appliances vignettes, cabinetry and flooring, for example). Meanwhile, other regionals have retrenched: Electronics Expo retooled into a one-location, custom-centric operation, and American TV & Appliance re-emphasizing furniture, HDTV and home audio after it dropped PCs, cameras and car audio earlier this year. After a major expansion, h.h. gregg grappled with falling comp sales.
Early 2013 saw consumer releasing their pent-up demand, especially on high-end products, but the federal budget/debt limit/Obamacare fight helped chill that. “They’ve got the money, they’re willing to spend, but they want to make sure they have a good value for what they’re spending,” said David Pidgeon, Starpower CEO.
Amid this market, and despite anticipation that consumer confidence will take another hit when Congress restarts federal budget/debt limit negotiations early next year, independent retailers are planning for growth in the year ahead.
Why? Four reasons: The market momentum around Ultra HD/4K television, an improved housing market that has boosted major appliance sales, dealer’s continued redistribution of sales and service offerings to reduce risk, and the increased awareness of new technologies including home automation/home control, and wearable health and fitness electronics. Another factor for many dealers: tighter integration of operations—including brick-and-mortar sales and service, ecommerce and IT systems.