Best Buy's Pivoting has Helped the Company Survive Amazon's Expansion

As more consumers look to online sources for many of their purchases, brick-and-mortar retailers have had to work on quickly adjusting their business model to stay in the game. Many such retail outlets have failed and filed for bankruptcy in recent years, including Radio Shack, once one of Best Buy's biggest competitors. Somehow, Best Buy was able to avoid a similar fate and has in fact made great strides since 2012, when most analysts thought they were doomed to fail. A recent L.A. Times article by James F. Peltz and Jack Flemming describes some of the methods Best Buy's CEO used to get the company back on track.

One of the biggest factors hurting the electronics chain's profits was a practice among shoppers called "showrooming." Consumers like to be able to see the products in person before purchasing them, which is one factor that makes people hesitant about making purchases on Amazon. However, they also want to make sure they're getting the best deal and spending the least amount of money. So, what they would do is go into stores like Best Buy, look at the variety of products, figure out which specific model they wanted to buy, then simply order it on Amazon for a cheaper price. To combat this practice, Best Buy invested more into expanding its market to the online sector instead of just focusing on its stores. Additionally, they have cut their profits on individual items in order to match Amazon's prices. In the short run, they may be losing money on an item-by-item basis, but overall, getting back some of their market share on electronics has been beneficial.

Even though Best Buy has been developing the online sales portion of their business model much more in recent years, the CEO of the company still considers the physical stores to be a huge asset. Although "same-store sales," which is a measure of the number of sales within a lasting store as opposed to new locations, was on a decline for 4 years, revenue at the older stores has been steadily increasing over the past 3 years. Online sales rose 21% this year and now account for 12% of Best Buy's overall sales. According to analysts, Best Buy's overall sales have remained flat because the electronics industry has been growing very slowly. The economy may be improving, but people are not buying as many "big-ticket" items anymore. Slower innovation and the vast range of retailers has led to a decrease in prices and less interest among consumers who might otherwise be interested in personal computers or televisions.

By offering the same prices as Amazon and speeding up their shipping times, Best Buy has been able to reel in some customers who want to get their product immediately, rather than waiting a while for it to be delivered. They also integrated a way for online shoppers to pick up the ordered product at their local store, which cuts down on shipping costs for both parties. Finally, Best Buy has invested heavily in education for their employees. By making sure that their employees are tech-savvy enough to explain products to shoppers, they are more likely to make a sale. Additionally, customers are more likely to shop at the store where the product is explained to them than on Amazon, where all they have is a description and some pictures. Improving customer service and lowering prices have helped, but it's still quite a while until we can determine whether Best Buy and other similar retailers will survive Amazon's spread throughout the industry.

***************************************************************************************************
Find out more about us at www.sepulvedaescrow.net. Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on Facebook, Twitter, LinkedIn, and Google+.

**************************************************************************************************

Study by Adobe Systems: Holiday Deals and Discounts of 2016

With Thanksgiving quickly approaching, many people are already starting to plan for the holiday shopping that comes right around the corner. Late November is often the best time to shop for the holidays if you're looking for great deals on many items. However, this rule often only applies to general items, not specialty items that might sell out quickly. Jonnelle Marte, in her L.A. Times article, describes the results of a study performed by Adobe systems, which tells shoppers which dates are potentially the best for deals on toys, electronics, clothing, and jewelry.

Just a few years ago, Black Friday started early on the morning following Thanksgiving, when many people were off of work and had the time to go wait in hours-long lines to get a deal on the latest products. More recently, though, Black Friday has undergone a shift to start earlier and earlier, to the extent that some stores start their "Black Friday" sales as early as 6 PM on Thanksgiving Day itself. Some items have their best deals on Black Friday, but not as many as might be expected.

Electronics are one category of items that receive the largest markdowns on Thanksgiving Day, according to Adobe's research. From flat-screen televisions to cell phones and computers, Thanksgiving is the day to get those deals. When compared to the average prices on the electronics in October, it was found that televisions are expected to be discounted by an average of 20% and tablet computers will have an average discount of 18%. Those deals won't last forever, of course, given that the stores only have a limited supply of each product, but for the deal-hunters that get to their holiday shopping extra early, they could find themselves snagging quite the discount.

Another type of item that has its greatest discount on Thanksgiving is jewelry. Adobe's study found that on average, jewelry will be discounted approximately 10%. The research also found that many people push off making those purchases until later on, closer to the holidays, often because they are searching for the "perfect" piece of jewelry, regardless of the jewelry's brand. Because they search for a certain style and higher quality of jewelry, they often miss out on the deals, but because they get the best piece they can, many customers don't mind missing out on the 10% savings.

Most other items have their greatest deals on days other than Thanksgiving/ Black Friday. For example, clothing and other apparel often have the greatest discounts on November 22nd, or the Tuesday before Thanksgiving. Retailers often start their discounts on clothing early, because it's not an item in major demand. Most people are more appreciative if they get a new electronic device on the holidays, not clothing, so the stores have to do something extra to get the additional revenue that has become expected during holiday times. In fact, some everyday items, like socks, will sometimes be marked down the most significantly right after the holidays are over.

As for toys, Adobe's research showed that the best day for deals would be Cyber Monday, which is the Monday after Thanksgiving. Cyber Monday is known for its online deals, but it is expected that most toys, especially generic ones, will be discounted an average of 13%. Toys are a more tricky item, especially for parents, because if they wait for the best deal on certain in-demand items, they may end up missing out on the item altogether, if te store's stock runs out. So, in general, Cyber Monday can offer the best deals on toys, as long as you're not focused on getting a particular toy. If you are looking for the latest Hatchimal or Lego set, you might want to pay a little bit extra to guarantee you get it.

Overall, the best deals seem to be those involving electronics that are offered on Thanksgiving Day. Every other deal seems to be a good one, but only to the customer who doesn't care about what specific product they are getting. For electronics, especially televisions, many customers don't care about the specific brand, so any discount on a large, flat-screen television is a good thing. When it comes to pieces of jewelry, people become pickier and look for quality pieces that won't necessarily offer the better deal. The above suggestions will benefit people searching for general products, but if a customer is looking for a very specific product, they might just have to bite the bullet and spend full price on it to help guarantee that they get exactly what they want.

***************************************************************************************************
Find out more about us at www.sepulvedaescrow.net. Any Questions? Contact our Escrow Expert! Sepulveda Escrow Corporation (818) 838-1831. Follow our company on Facebook, Twitter, LinkedIn, and Google+.

***************************************************************************************************