It is fascinating that specialty stores were a leading indicator for what is now happening to Best Buy. The real issue we had was the inability to drive people into our stores. That is now Best Buy’s core issue as well.
Best Buy used software very effectively to address this in the past, and there are a few bodies left on that trail, such as Tower Records, and of course all the specialty music stores that Tower hadn’t crushed yet. Now Best Buy doesn’t have that weapon, and you can see tumbleweeds blowing across their showrooms, even in the peak holiday season.
Magnolia was a thinly veiled way to get the quality brands, and the manufacturers generally bought that one hook, line and sinker. The price gets paid by the entire industry when the promised value proposition is not delivered. End result: No one wants to pay for service or expertise, either because they expect it for free, or they don’t think it really exists.
And no one except a few fringe purchasers believes any one store or channel is necessary to get the product, brand or quality they want. Guess who is dying by their own sword in that new world?
We can try to roll that boulder back up the hill or accept the world as it is.
One remarkable thing Best Buy did a few years ago during Brad Anderson’s tenure was to develop the customer centricity model. A central tenet of that was to start with what your customer wants and develop your strategy from there, not your own value proposition.
Clearly, the current Best Buy has lost sight of this. Blame Amazon, or the Internet, or smartphones and QR codes if you want to, but I don’t buy it. When you start with your value proposition, or competency, or margin requirements, etc., and work out from there, these are the kinds of bad things that happen.
I try to live every day by the tenet that the market opportunity dictates my strategy, and not the value proposition or go-to-market strategy I prefer or am comfortable with, as I build my new company. I suggest it is words to live by for the audio industry as a whole.
Gary Yacoubian, president and managing partner of Specialty Technologies / SVSound, was president of Maryland-based specialty retailer MyerEmco, chairman of the Consumer Electronics Association and strategic development VP of Monster Cable.