Written by: Robert Heiblim, Co-Founder and Partner, bluesalve partners
The recent closing of Fry's and the changes at Best Buy do not mean the end of brick and mortar for our industry. Today we read headlines about threats to physical retail in virtually every product category, particularly consumer tech. While pessimism about brick and mortar in our sector is understandable, I think this take is actually quite wrong. In the case of Fry's, this was an outcome that was many years in the making. Moreover, the changes at Best Buy are part of a smart management team moving with the times. Brick and mortar is still with us and always will be.
In both cases, you are seeing the market impact on big-box retail, but in each case, you are seeing a very different result. Today, the massive assortment that once made these retailers who they are (were) is no longer found in their stores, but on your phone or in your browser. The good things about these formats that made these companies into who they were have changed due to the internet. Best Buy is doing great these days, and seeing booming internet sales strengthened by BOPIS, which is enabled by their store base. They are right-sizing store count and converting stores into local fulfillment hubs. Sounds like a good adjustment to me.
Fry's, on the other hand, had a hard time adjusting. Not only were they very late to e-commerce, but their approach was simply not competitive. They had trouble with becoming consumer friendly, as all their competitors had to do. Low price is just not enough anymore. On top of that, poor relations with suppliers and employees also meant lack of support when Fry's needed it most. We may feel sad about it and it is unfortunate, but the dinosaurs all died too.
In the meantime, the need to touch, feel, see and hear things remains a constant with many human shoppers. Not all of us can understand things without contact, so fear not for physical retail. Instead, expect more changes in size, shape and method. The next time you're out shopping observe your fellow shoppers as they go. They like – and often need -- to see what is new to them, or to squeeze the fruits and veggies before they buy. This is true in all categories of goods.
Once more, it is best to be proactive and not reactive. The retailers (and their vendor partners) who adjust and embrace change will fare the best. We have a lot of experience, both good and bad, on our team when it comes to change and because of that we’re able to effectively help our clients to navigate change. Don't fear it; try to understand it and find a path forward. There is a lot of opportunity out there.
At bluesalve partners, we have an active product development process we can share with clients to accelerate and improve their batting average. Better outcomes are good for everyone, the firms, the industry, and their customers. Let’s all get better together.
Bluesalve partners is committed to accelerating change, growth and success for our clients.