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Best Buy Won’t Out-Amazon Amazon
By: Andrew Davis
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Best Buy isn’t happy. It knows that consumer behavior has changed over the course of the past few years, and that the brick-and-mortar, big-box stores have given way to a growing trend of online shopping. Hoping to reverse a one-year drop of $18 in the price of their stock, Best Buy is looking to make some changes before it becomes the next Circuit City. 
 
According to The Motley Fool writer Rick Aristotle Munarriz, Best Buy’s “road map” to success in the coming years involves targeting mobile customers with smaller stores, growing its global market in China, focusing on video gaming and appliances, and expanding its online sales in order to compete with Internet retailers like Amazon.com. As Munarriz says, all of these steps sound great on paper, but they don’t address Best Buy’s real branding problem: What is “Best Buy,” and how are they different from their competitors? 
 
It’s an identity crisis, and one that its new business plan fails to address. By expanding its product line into video games and mobile, Best Buy will be faced with niche competitors (such as Game Stop for video games, and the wireless carriers themselves for mobile) that have the luxury of having to only focus on one consumer sector. Does Best Buy think it can offer consumers better, or cheaper, offerings than these niche retailers? 
 
And for online retail, Best Buy can’t do what Amazon does. For one thing, its brick-and-mortar footprint ties it to the physical world. So long as Best Buy maintains stores, it is obligated to variables that online retailers can avoid (utilities, in-store employees, limited retail space, etc.). Avoiding these costs and restrictions are what gives Amazon its edge over competitors. 
 
It’s something Walmart figured out years ago. “You can’t out-Amazon Amazon,” says marketer Seth Godin, who saw this marketing maxim a decade ago on a banner hanging in Walmart’s corporate headquarters. “If Walmart has said 'We will not be able to win the race for selection, shipping, and price,' then why do you think you’ll be able to?” says Godin. Walmart knew they would never be able to compete with Amazon on an online playing field. They accepted the defeat early on, and instead focused on retail in physical locations. This saved them millions of dollars in what would have been a futile, online battle. 
 
Best Buy should accept the same, and instead leverage one asset Amazon doesn’t have: its employees. Even though online consumerism is a growing trend, there is still a segment of the market that feels more comfortable purchasing goods the old fashioned way: in-store. Best Buy could put more focus in online retailing, where it will always be outmatched by online competitors; or, it could invest that capital in making itself the best physical retailer of electronics. 
 
Having well-staffed stores with expertly trained employees able to assist consumers with questions and product recommendations, Best Buy could service consumers in a way that no online retailer can. With this strategy, it could differentiate itself from competitors like Amazon, and own the category of consumer electronics in brick-and-mortar stores. Best Buy could define itself as “the” place to go to for electronics because consumers would know they would be making informed decisions based on the advice of “experts” rather than just product reviews. If Best Buy can win consumers on expertise, it doesn’t have to win them on price. 
 
It seems to be a much more worthwhile effort than making the mistake of trying to do battle with both online and offline competitors. After all, a servant can’t serve two masters. It’s a multi-front war that Best Buy cannot, and will not, win.


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About the Author
Andrew Davis is a Charleston, SC-based creative services consultant to small businesses and non-profits. Follow him on Twitter here.
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