A moment of silence please for the dearly departed…
Including Circuit City, Movie Gallery Borders Books and Ultimate Electronics.
And now with Best Buy and Blockbuster, on the ropes, newspapers and magazines hanging on for dear life, it’s clear when it comes to the ravages of the World Wide Web, nothing is sacred. Raising the question of if we’re entering an era where local retail will be limited to a handful of specialty store survivors.
"If you had any doubts that nowadays people prefer to shop electronics online, the latest earnings report from Best Buy should make you a believer," CNN Money said last month. "The nation’s largest electronics ‘brick and mortar’ retailer announced a 30% decline in its net income for the second quarter. Same store sales slid 2.8%"
The flip side of that toe stubbing:
"Meanwhile, Amazon, which has become an e-tailing powerhouse, continues to grow revenues," CNN added."Its shares are less than 5% from an all-time high level and up almost 50% for the past 12 months."
Kansas City audio / video retailers have been dropping like flies for years. Can even the once mighty Best Buy survive?
"Best Buy is without a doubt the dominant audio/video chain in America," says John Kiefer, owner of a/v retailer Kief’s in Lawrence.
Kiefer stopped short of forecasting Best Buy’s demise, saying only, "My personal opinion is they’re less than they were a year ago."
CNN reader/commenter Jeffrey Nagy offered a far less generous take .
"Best Buy is seeing what every retailer with an online counterpart will inevitably have to deal with," Nagy wrote. "The only retailers spared are the ones that sell products that have to be so exacting to the individual that purchasing online creates too many variables… like clothing."
Part of Best Buy’s problem – believe it or not – is the death of its chief competitor Circuit City, Kiefer says.
"When they had Circuit City they had competition and you need competition to keep you sharp," Kiefer says. "And they don’t have that right now – they’re just a store."
Will local audio retailers even exist in the years to come?
"What I think is simply this," Kiefer says. "Our industry has changed from an audio industry to stores selling small, miniature ipods, iphones and ipads. You know, a way to get stuff where you don’t even have to think about it. We’re not seeing customers who want music. What they want is noise. What I’m saying is today’s consumers by and large seem to be shopping for a lot of features and tech stuff. They’re not looking as much for true audio."
Which has effectively transmuted what’s remains of the electronics retailing industry, Kiefer says.
"All of the box stores today are loaded with a lot of gadgets and you don’t see a lot of audio," Kiefer says. "You don’t see a lot of audio and what audio you do see is entry level audio. You do see a lot of TVs."
Bypassing local retailers and purchasing electronics online was shortsighted because, "Specialty stores have always been the most honest stores in my opinion," Kiefer says. "But when consumers went online to save a few bucks, the specialty stores went out of business. Now the two main places you can buy audio and video gear, the box stores and online are the highest priced places left.
"Today old line stores – guys like me who have been there for 50 years – are all that’s left. Who’s got enough money to open a specialty store today? So what you’re seeing is the Nebraska Furniture Marts which are extremely large, but they can’t tell you much about the products."
"What’ll happen is if the only thing you can walk in a store and see are mediocre products, then mediocre is gonna be thought of as good," Kiefer says. "What consumers are doing is trading quality of sound for quantity of music that is portable. They don’t know any better. You know, if KU was the best football team you ever got to see, then people would think of KU as the national champions. That KU must be the best."
The bottom line:
"I think technology is telling the customer, I want it easy, fast and cheap. Add those up and who’s going to stay in business?"
So how long can smaller specialty retailers like Kief’s survive?
"I would argue that in the future a store like Kiefs – provided I want to stay in it or somebody like me does – can survive," Kiefer says. "But you may have to go 250 miles to find a real store. I don’t think it’s going to be bad forever. And we’ll be one of the ones left. I think so – I do think so.
"What I believe without a doubt is the industry will have to evolve kind of like the car business, except the government isn’t going to help us. There were way too many cars out there. So what we need to see, for the audio business to get good again, is about half of the choices of products and half as many choices of places that sell them."