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The Minneapolis/St. Paul Business Journal reports that Best Buy, the nation’s largest electronics retailer, plans to reduce the standard size of most of its new stores by between 30 and 40 percent, a move that the company says will allow it to open in previously unavailable locations, filling in between existing units, as well as being more efficient in the merchandise it displays and the way in which it operates.

According to the story, the standard Best Buy footprint has been about 45,000 square feet, but 60 of the 90 stores it plans to open this year will be 30,000 square feet and another 10 will be 20,000 square feet.

“Best Buy and other retailers are starting to place an increased emphasis on store efficiency, and smaller stores tend to perform better in that regard,” the Business Journal writes, noting that “many consumer electronics are getting smaller, requiring less shelf space. Stores also are devoting less floor space to CDs, as many consumers now buy or download their music online.

“The smaller Best Buy stores display fewer floor models for some items, such as flat panel TVs. Unlike larger stores, only 50 to 75 percent of the models are displayed, along with tags referring to additional varieties that are held in the storeroom.

“The smaller stores also devote less floor space to appliances, displaying only a few select models of washers, dryers and dishwashers.”
KC's View:
Good object lesson for retailers of all stripes.

Food retailers ought to think about this approach. Seriously. (And we mean really think about it, as opposed to creating an initiative called “efficient consumer response” and then only making the changes that didn’t hurt too much.)

If 80 percent of the industry’s sales are generated by 20 percent of the merchandise, then retailers ought to either dramatically cut back on the stuff that isn’t selling, or be more aggressive about informing consumers about the 80 percent of the merchandise that isn’t generating any sales. If they tell people about this stuff, letting them see it and smell it and taste it, then maybe they’ll sell more. (This is, by the way, exactly the proposition made by Chris Anderson in his terrific book, “The Long Tail,” which we’ve been promoting around here like we get a percentage of the sales. Which we don’t. If you haven’t read it, go now to and order it. Now.)

By the way, in some ways this isn’t a new initiative for Best Buy. It’s been playing with smaller stores and specialty units for some time now, trying to find the right formula for future growth. We continue to be impressed.

One other thing. We don’t see Best Buy announcing that it is going to eliminate all the experienced, knowledgeable and best-paid salespeople in its stores as a way of cutting costs and getting efficient, which is exactly what its major competitor, Circuit City, did.

Which is one more point in the Best Buy column.

Interestingly enough, this story about best Buy came out at almost the same time as CompUSA, one of its alleged competitors, said it planned to narrow its marketing and merchandising focus to appeal mostly to people who love gadgets, as well as small and medium sized businesses. We’d suggest to CompUSA management that if would be better off targeting consumers who like dingy, dark stores with unfriendly personnel …because that pretty much sums up the CompUSA units we’ve been in.