It used to be a common joke in publishing: if your publication is floundering, launch a redesign. Then it wasn't funny anymore; publications either went online or shut down entirely. Is there a corollary in retail?
Best Buy has launched a redesign: the electronics retailer has reconfigured its outlets to look more like… Apple Stores. Best Buy is floundering: For its fiscal quarter ended in May, the company reported net earnings of $161 million, down from $255 million in the comparable year-ago period. Its CEO Brian Dunn resigned in April, but reportedly not for financial reasons.
The Apple Store concept is a proven success — but it only sells Apple products. What does the Best Buy do-over mean for the other dozen-or-so direct Apple competitors it carries?
It might mean nothing. Consumer electronics companies should be used to partners becoming competitors. Samsung supplies to Apple through one business but competes with Apple in another. Google is competing with its ODMs by launching its own tablet, as is Microsoft. And that's only in tablets: Best Buy sells phones, software, music, video, gaming systems, white goods, GPS systems, TVs, printers, routers, and lots of other stuff, and it provides installation and repair services. If any of its other brands had storefronts with identities as unique as Apple's, it might be an issue. As it stands, there hasn't been any outcry from non-Apple vendors over the Best Buy Apple-like makeover.
There's a second reason why the storefront ultimately might not matter: it's called showrooming. Consumers interested in big-ticket electronics items go to a retailer to test-drive the products and then go online to buy them. Ironically, many of those purchases are made on Amazon.com — which makes the Kindle tablet, which competes with every other tablet in the market.
Best Buy's makeover could also signal a sea change for retailing in general. Target is beginning to host boutique stores within its vast retail locations. The idea of a limited-brand, high-service store apparently resonates with consumers. Microsoft reportedly is also going to try branded storefronts. But if this is the model for success, Best Buy still isn't getting it right. Until Best Buy — or any other retail outlet — can provide a high-service boutique experience for all the brands it carries, it's just another struggling retailer. And a redesign isn't going to save it if shoppers continue to buy online.
Just ask the publishing industry.