Parking Lots Are the Only Indicator Needed
Michael is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
I remember the time I was in high school (late 90’s) and also as a undergrad in college (early 2000’s) when Best Buy (NYSE: BBY) used to be the place I always shopped. I mean, Best Buy had everything I wanted – TV’s, music, video games, cameras, computers, electronics, everything! The biggest bummer about going to Best Buy was that the parking lots were always packed. I would spend more time driving around the parking lot trying to find a place to park than I would inside the store! That's no exaggeration. If you lived in the northern Virginia area during this time, and were around a Best Buy there, you know exactly how crowded Best Buy was. Some of the Best Buys were built with multiple level parking areas, with elevators that exited right into the store. Others were just huge buildings and overall the new atmosphere exclaimed ‘the future is here!’.
Now Best Buy parking lots are mostly empty and stores have more employees standing around than actual customers. It is somewhat sad. I can’t really call anyone out though because I am not looking for parking spots either. Actually the last time I went into a Best Buy to buy anything was a PSP back in 2007. That was 5 years ago and only because it was the same price as online! Best Buy is still around but so are other places with equally depressing parking lots. Some that come into mind are Wendy’s, Radioshack, Staples, Office Depot, Burger King, Barnes & Noble (NYSE: BKS), Toys R Us, and generally most shopping centers/malls I have been through in recent memory. It should be no surprise that Wendy’s has barely moved at all in terms of stock price from the Great Recession to now, that Burger King is going public yet again later this year after going private in 2010, and stores like Barnes & Noble are only delaying the inevitable - bankruptcy.
You might say online sales killed the brick & mortar. Well is that really true? Or did the brick & mortar fail to think outside the ‘brick & mortar’. Places like Target and Wal-Mart (NYSE: WMT) have full parking lots. The other day I had to walk like half a mile to get something from Wal-Mart that I actually ordered online to have shipped to the store. There aren’t any cemented rules on what to include in a brick & mortar based store; however, many companies seem to be following traditional philosophy on how to be a retailer. Places like Best Buy failed not because of online in my opinion. Best Buy has an online store themselves. Instead, retailers need to look at what a place like Amazon (NASDAQ: AMZN) does that allows it to succeed. Is it the cheaper prices for the same items? How is Amazon selling these items cheaper?
Best Buy instead should focus on what they can do to bring customers in the store. If they can’t drop the prices to match a place like Amazon for a big screen TV, maybe they can offer something else? How about in-store warranties that don’t cost extra money? Or free installation? I know I wouldn’t be alone if I could buy the same TV at a slightly higher price as an online seller at Best Buy, but with an in-store warranty included. It would be great to know if something broke, I could just call the local Best Buy and have them fix it for free. That is far better than having me package and ship the entire thing back myself to an online vendor.
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