Better Buy: Amazon vs Best Buy
The internet brought a lot of great things into our society. It increased the spread of information, connectivity to one another, and provided millions of jobs in countless industries, to name just a few. However, there have been some negative impacts from the internet. Arguably, one of these has been because internet shopping has proved so popular, it’s forced physical bricks and mortar shops to close.
There is a lot more nuance to this, but essentially because of the lower overheads associated with not having to pay for staff and rent on physical locations, online vendors have often been able to out compete physical retailers and offer lower prices that attract customers. This has either directly pulled a customer base away from shops, or they’ve been forced to try and compete on prices , resulting in tighter and tighter margins until it is eventually unprofitable. Couple this with changing trends in shopping and the convenience of being able to get an item delivered to your door, it’s easy to see why more and more shoppers are moving online.
But this is not the complete picture, there are some retailers that bridged the gap into the digital world. This article will look into the strategies and success of Best Buy and Amazon. Best Buy almost succumbed to the pressure from online retailer Amazon and shut its doors. Instead of closing down, the business adapted and created a new strategy that saw it move into new areas of success.
What is Amazon?
If you are using the internet, it’s difficult to imagine that you haven’t at least heard of Amazon. But on the small chance that you don’t know what Amazon is, we’ll quickly summarise it below.
Amazon began its life as an online retailer, which is what it is still best known for. However since then it has diversified into numerous industries including cloud computing, entertainment, and data analysis.
As a retailer, it's been able to out compete most shops it enters into a market against. This is either through price or because of the sheer size of the company it can out maneuver smaller competitors.
What is Best Buy?
For years, Best Buy has been a household name for consumer electronics in America. With chains of superstores around the country, millions of people walked through its doors every year. However, as mentioned above, the retailer was on hard times. But in 2012, a new approach turned around the fortunes of the business. Here’s what they did.
One of the main differences between online shopping and physical shopping is that you come into contact with people. This is a big USP in competing against online retailers, however the employee satisfaction at Best Buy was low. In 2012 the new CEO put a lot of time into listening to the employees and creating plans for improving their job satisfaction. Creating happy employees resulted in them giving a better service to customers, which means improved chances of repeat business.
Improve areas of weakness
One of the biggest areas of opportunity that the company was losing on was something called ‘showrooming’. This is where people come to a store to see and test an expensive item, then they go and buy it cheaper online. Best Buy actually used this to their advantage and implemented a price matching system. While this competition does lower the margin on products, this was offset by creating new partnership deals with electronics companies to feature their products.
Communicate and create community
Best Buy was able to create a stronger connection with its community compared to Amazon. They had a specially trained group of technical experts called the Geek Squad which could help customers with their issues. But they went even further with this and created the In-Home Advisor program. With this, an advisor would go to a customer's house and help with their issues.
By focusing on the strengths of physical shops, Best Buy was able to turn a success and buck the trend of a lot of other online vendors. Instead of directly competing against the internet, which would have been a fight it would have lost, it instead decided to readjust and find its space alongside the online retailers by offering a service that they are not able to provide.
SoftBank Vision Fund's head, Rajeev Misra, saw his total pay for the past business year more than double to 1.6 billion yen ($15 million), even as the fund's underperformance pushed SoftBank to a record $13 billion operating loss.
The majority of people working online in internet based services will have come across the name GoDaddy at some point. The company is the biggest domain registrar operating, with over 78 million customers registering domain names with them.
Wix – Launch Your Dream Website Today
Over 120 million customers around the world have built their websites using Wix. A publicly traded company ever since 2013, Wix’s primary source of revenue is its simple and straightforward website builder. Keep this detail in mind, because it’ll come up again it later.
Chinese video app TikTok's practices are to be examined by an EU task force, the bloc's privacy watchdog said on Wednesday, which also warned EU police forces against using facial recognition software from U.S. company Clearview AI.