re: Best Buy Stock Plummet

If I was the Best Buy CEO, then it is time for a drastic new approach to the business. I haven't given it a ton of thought, but here is the general approach I would take.

Problem: You are primarily dealing with a showrooming effect and the cost of carrying inventory relative to etailers makes your brick and mortar shop ineffective.

Solution: It is time to take a page out of Bonobos. Best buy needs to innovate on virtual displays providing the consumer with copious amounts of product information. It needs to save the consumer time by bringing together consumer reviews from data sources across the net and providing critical reviews of each device it sells. I imagine this as being a combination of CNET, newegg, Amazon and manufacturer information all in an instant access format within the store environment. What this does is it allows the consumer to expedite the information absorption. A one-stop shop of practical consumer information.

Next, you have got to move to a sister store supply chain model. Downsize the footprint of the B&M stores but then create mini-distribution centers across the country that fulfill the demand for the local stores. Within the B&M environment, there should be dynamic pricing - one price for the consumer to leave the store with the item (limited in-stock inventory keeps cost low and consumers pay a premium for immediate satisfaction of walking out of the store with the item) and a second price that guarantees the item will be shipped to one's home within 24 hours (ideally 12 hours) that resembles online pricing. This price is lower and is fulfilled from the mini-DC 'sister'. This allows for consumers to showroom at a low cost to Best Buy, still feel like they are receiving a good price and also receive the item in a reasonable period of time (but not immediate, so lower pricing).

These two things would be game changers for Best Buy. It embraces the showrooming to its advantage over etailers.

This also puts a massive strain on the IT and supply chain capabilities of the system. I would be interested to see how these would impact fixed and variable expenditures throughout the fulfillment, but this would be the strategic direction that I would set.

If they keep the status quo, then Best Buy will die. Leadership has an opportunity to challenge the way that retail has worked since inception and the risk of failing is on the table whether they are revolutionaries or they die a slow death through quarterly hemorrhage.

Interested in the boards thoughts on these topics. This is in my wheelhouse in terms of the type of work I do, so it would be great to bounce ideas around.