Tuesday, April 19, 2011

Where do you buy your electronics today? Where will you buy your electronics next year?

Perhaps there are people who buy their electronics at high-end electronics stores, but for more generic electronics, people are more likely to go to a general store with low prices, such as a Costco or a Wal-Mart.

But there are more people who go online to buy their stuff, and that's causing changes at Wal-Mart:

Wal-Mart Stores Inc., the world's biggest retailer, plans to cut back on space for electronics as sales in that category have declined, contributing to the company's two-year U.S. sales slump.....

At an investor conference last month, Wal-Mart's U.S. chief Bill Simon said "we couldn't possibly sell enough TVs" during the holiday season to justify the space allotted to electronics. In February, Simon cited electronics as the "primary factor" for the company's negative comparable-store sales result.

The article, from the Riverside (California) Press-Enterprise, also notes that Best Buy is affected.

Perhaps this is cyclical - just two years ago, Wal-Mart INCREASED the floor space devoted to electronics. But unless Wal-Mart and Best Buy come up with a good strategy to compete with Amazon, and unless devices start getting bigger instead of smaller, the amount of floor space devoted to electronics in brick-and-mortar stores will continue to decline.
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