Electronics Retailers Struggle To Survive

Electronics Retailers Struggle To Survive, Fewer consumers are buying gadgets and appliances at big-box stores like Best Buy. Even as Best Buy insists it can get out of its current predicament, competitors are circling, as everyone tries to prove one point: that electronics stores can thrive.

Best Buy is closing 50 of its big-box stores, and its sales at stores open at least a year are falling. Brian J. Dunn, its chief executive, recently resigned after the board found he was having an inappropriate relationship with a subordinate. Richard Schulze, who founded the company in 1966, said this month that he would leave the board immediately, a year ahead of schedule, and is trying to sell his 20.1 percent stake in the company.

Now, Walmart is running ads going after Best Buy consumers; a Chicago-area competitor is expanding amusement park attractions in its store to lure shoppers; and Target is selling Apple products – all in an effort to make buying electronics in a store appealing again. The trends are not favorable. People are increasingly buying electronics online, even if they go to stores to examine product features. The price of televisions is sliding, and CDs and DVDs are not nearly as popular as they once were. Retailers are stuck with lots of space as products shrink or go digital. And because many manufacturers are not allowing retailers to advertise below minimum prices for their products, stores cannot publicize sale prices the way they once did.

Sales at physical electronics stores have declined an average of 2.6 percent a year in the last five years, according to the market research firm IbisWorld. Sales of electronics online have risen an average of 14.7 percent a year in that period. Chains like Circuit City and CompUSA have collapsed under the pressure. (CompUSA has been revived in some locations.)

So the stores that hope to survive must change.

Take Abt Electronics, which has a 350,000-square-foot store in Glenview, Ill., a Chicago suburb. “People think that’s crazy these days,” said Jon Abt, co-president of the store, but “if you’re going to have a showroom, you need to make sure you’re having a unique experience.”

“We’re seeing more people shopping on their phone and on their computers, but that doesn’t mean store retail’s necessarily dying,” he said.

Because shoppers often have their children with them on weekends, Abt has installed lots of activity stations for children and adults.