Best Buy gets paid a bounty by the carrier for each customer it signs up. But the incentive structure is flat, so salespeople aren’t biased toward one phone or the other. That’s the store’s biggest appeal: it isn’t trying to push one product over another, and offers virtually all of the products from each of the major carriers. It will also often bundle in additional discounts or freebies, such as a Best Buy gift card or free video game.
Even as it closes big-box stores, Best Buy plans to open 100 standalone Best Buy Mobile stores. That could very likely be the start of a broader migration toward a more mobile-centric offering.
Still, the continued interest in smartphones may not be enough to get Best Buy through its recent struggles. The closing of 50 big-box stores this year fiscal year portends the same kind of troubles CompUSA and Circuit City faced before they declared bankruptcy and disappeared.
Meanwhile, Best Buy’s sales declines in its other segments continue, with languishing demand for consumer electronic products. The 21 percent month-over-month decline in the entertainment category is particularly stark.
More importantly, Best Buy is losing the e-commerce battle to the likes of Amazon, which has grown into the de-facto place for consumers to buy their goods.
But fortunately for Best Buy, handsets remain a place where consumers want advice and touch and feel and actual device before making a purchasing decision, something they can’t do with a Web site.
So how Best Buy looks in a few years — or whether it survives — remains an uncertainty. But it could very well end up as a mobile device-centric chain, rather than the one-stop shop for all things electronic.