As Goes Best Buy, so goes the U.S. Economy
Best Buy used to cater to the U.S. public need for electronic gadget, but today there are fewer customers in its stores. This is due to the fact that baby boomers have everything they need and the younger population do not have access to credit. This points out to a broader conflict confronting the U.S. economy. The majority of people who still go to Best Buy, are the young population and Latinos. Neither of these groups are known for their vast spending powers. Those who do have spending power are more likely to go to an Apple stores if they need something. The baby boomers are simply shopped out, they have everything money can buy and today there is little reason to buy.
http://www.salon.com/2014/01/25/the_story_of_best_buy_is_a_scary_predictor_for_the_u_s_economy_partner/
I think Best Buy’s shortage of customer has less to do with baby boomers, but more to do with their price. Best Buy is known for having expensive electronic gadget and most consumers are price driven. For example, why would you want to buy a computer from Best Buy for $500 where you can buy the same exact computer for $350 on another store? The shortage of Best Buy’s customers is not the result of the young population and Latinos, rather, the result of how Best Buy markets their product. When I think of Best Buy, the first thing that comes up on my mind is expensive. I would go far as to say that the majority of the people view Best Buy’s product as being expensive. One solution for Best Buy’s problem is to market heavily in order to change how consumers view their product.
ReplyDeletePersonally, I see many downfalls in this article. The main one, however, is that there seems to be a tremendous lack of data to support claims they have been made. The article makes a claim saying that baby boomers no longer need the goods that Best Buy sells, such as appliances and TVs. From where did this information come? Couldn't it also be the case that some are wanting to downsize due to age or becoming empty-nesters and will therefore need appliances for the house to which they are moving? The author then goes on to say that the problems in Best Buy are currently hidden problems in the US economy. However, he gives nothing to back up this claim. Lastly, there is the claim that many will go to Apple stores rather than Best Buy in order to buy goods. If it is, in fact, the case that Best Buy's prices are too high, then why would a consumer go to an Apple store? Apple sells luxury goods, which are even more expensive that the normal goods that Best Buy sells. While Best Buy has high prices, there wouldn't be a reason for consumers to go to Apple for more expensive luxury goods when demand for normal goods seems to be lower.
ReplyDeleteBest Buy simply cannot compete with Amazon on pricing. Over the holidays Best Buy offered deep discounts to keep up with their competition and their margins got hammered. Over the past two weeks the 267 percent price appreciation the Company achieved in 2013 was reduced by two-thirds.
ReplyDeleteA major reason for the decrease in customers at Best Buy is the rapid increase in the online shopping sector. These days many people will go to the store in order to see the product in person, then if they want the product they will purchase it online for the best price they can find. Best Buy and almost every other store across the country have become product testing locations. This does not mean the economy will begin to fail, it means that consumers are beginning to spend their money online. The same amount of consumer spending will occur, the difference is in the way goods are purchased as technology increases. Whether you purchase an item at a physical store or online, the cost of the good will be added to consumer spending regardless.
ReplyDeleteInternet based market places are definitely on the rise, as they provide high convenience for shoppers. Chris and Matt make a good point between shopping online with amazon and not going to physical stores like best buy. Another example of this sort of convenience issue could be how Blockbuster has been closing numerous stores, but this doesn't reflect a decline in movie rentals. Sites like Netflix and Hulu and even Amazon on Demand make it much easier to "rent" movies through streaming or even mailing out DVDs, cutting down on the personal time that would have been used to go to a store and pick out the DVD and allowing it to be used in other ways.
ReplyDelete