Are bricks-and-mortar stores dead? The prognosis certainly doesn't look good.
Best Buy says it will shut down 50 of its big-box stores and experiment with outlets that are 20% smaller. The electronics heavyweight also says it will slash $800 million in costs by 2015, including about 400 jobs.
The problem is partly attributable to consumers' growing habit of using stores like Best Buy as storefronts for cheaper online merchants. In other words, people will check out new TVs or appliances at Best Buy and then buy them for less from the likes of Amazon.
Great for Amazon. Not so much for Best Buy.
It's pretty much the same dynamic we saw in the bookstore business, and now real-world bookstores are an endangered species. Electronics stores are no better off (can you say Circuit City?).
So it's fair to wonder if any business can survive the e-tailing juggernaut. We're comfortable these days buying almost everything online -- clothes, shoes, household goods, cars, even food. Why would any business want the overhead of a bricks-and-mortar presence when shoppers no longer require being able to actually handle the merchandise?
Perhaps the solution for retailers is specialization. Amazon is the new big box, its endless cyber-aisles stocked with basically everything. To compete, you need to offer products that are hard to find elsewhere, or a level of service that's impossible in the digital realm.
Call me old-school, but I like being able to interact with an actual sales person, and I like knowing I can bring a product right back if it doesn't work (and I've been disappointed with enough stuff purchased online to know that e-commerce isn't foolproof).
If I was a merchant -- a real-world one, that is -- I'd emphasize these points. The human touch still counts for something.