Best Buy Worried About Walmart

I read an article 3 or maybe 4 years ago now the predicted the fall of Circuit City. It was right around the time that Walmart began to push heavily towards CE product sales. Cameras, Computers & Flat Screen TV’s. I wish i would have saved the article, it explained how Walmart would chip away at Circuit City’s #2 role in the big box store arena. What the article did not mention is how online sales would play a role. Between online sales and Walmart there was no room left for Circuit City and they eventually folded.

Best Buy is next. Whenever companies name names in commercials its because they are getting worried and maybe even a little desperate. I wish i had time to experiment. I would love to find a TV at Walmart and try to get Best Buy to price match it. They probably don’t carry the same models making this video sillier than it already is. I guess Best Buy has to deal with tire kickers also :).


2 Comments

  • Keith

    August 5, 2009

    About a year and a half ago, I heard that Walmart was really gearing up for CE product sales.

    The gentleman who was speaking that day compared Walmart vs Best Buy to Mike Tyson vs your Grandmother, (or something to that effect) in that Walmart would completely dominate the industry as far as volume sales were concerned, and Best Buy (and Circuit City at the time) would soon be considered boutique stores.

    He then compared us small custom integrators to being gnats on your Grandmother’s forehead when fighting Mike Tyson.

    Point being, Walmart is probably in the best position ever to undercut everyone on prices for equipment… however, they can’t offer the service and know-how that custom integrators can.

    What we’ve all known for a long time, and Circuit City didn’t learn, and what Best Buy is probably trying to learn now is this… a TV is a TV, but the installation is what makes that TV worth having.

    As long as custom integrators are paying attention to their clients, treating them with respect and providing the best service possible, just let the big guys fight it out. Their money is in product volume, and they couldn’t care less what happens once you push the cart out the door. It’s up to the integrators to keep the CE industry fun and functioning.

    Reply
    • wiremunky

      August 5, 2009

      We can look at any service industry and see the same thing. Construction, IT and now CE. Hardware markup slowly becomes a distant memory. The handful of things that still make us money like control systems & ultra highend speakers will soon join the Plasma TV and source components on the list of things we dont make money on.

      Thats ok though and IMO better for us long term. We now have to stop giving our time away. We have to bill like interior designers & architects, every hour gets paid for. So now when you spend 5 hours in a meeting with the cabinet guy because he cant read a drawing you get to invoice for that consultation time. We have to stop marketing ourselves as hardware suppliers and start marketing ourselves as consultants who provide installation. The ultra successful companies were smart enough to bill for their time when there was still money to be made on hardware while the rest of us gave system design away for free for a decade.

      Reply

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