Best Buy has dumped $20 million into its 43 Chicago-area stores this year, giving an overdue face-life to one of its oldest markets and adding several new features, such as high-end appliances and professional-grade cameras, that the electronic giant hopes help it stay relevant amid stiff competition.
Best Buy, the nation’s largest consumer electronics retailer with more than 1,000 stores, is in the midst of a plan to tackle declining sales and shrinking profit margins. The retailer plans to reduce costs, improve supply chain efficiencies, and ramp up the in-store experience to give shoppers a reason to shop at Best Buy instead of Wal-Mart, Amazon.com or tech stores such as Apple or AT&T.
According to the company, the Chicago market, which represented Best Buy’s first expansion into a major metro area in the early 1990s and has one of the retailer’s densest store counts in the country, is the only one to have all of its stores remodeled. With the retailer focused for many years on expansion, some Chicago stores still had their original 1990s fixtures.
But new carpet and brighter lighting aren’t the only changes.
To entice shoppers, stores in Lincoln Park and Orland Park became the first in the country to feature 6-foot-by-8-foot Samsung Center Stage touch screens where shoppers can pull up specs and test washing machines and refrigerators against different decor, swiping images on the digital screen much like a CNN anchor on election night.
In addition, Best Buy in summer debuted premium brands at new Pacific Home and Kitchen stores inside Chicago-area Best Buys in Downers Grove, Joliet, Schaumburg, Aurora, Vernon Hills and Bloomingdale, for the first time offering products from Wolf, Viking and Bosch. Best Buy, which bought California appliance retailer Pacific Sales in 2005, has 120 in-store Pacific Home locations nationwide that sell high-end appliance brands and offer custom kitchen design.
Best Buy is trying to position itself as a premium seller in several areas. It is expanding its Magnolia Design Centers in its stores in Downers Grove, Schaumburg and Bucktown, which offer high-end entertainment brands and custom home theater design and installation.
It has added Camera Experience Shops to stores in Downers Grove and Schaumburg among 36 nationwide, where it offers almost triple its regular assortment of cameras, including dozens of high-end digital SLR lenses, aiming to cater to photography fans or professionals left in a lurch as many dedicated camera stores across the country have closed.
A Walker Sands survey, which looks into the future of retail, stated that 69 percent of shoppers say they buy their consumer electronics online, more than any other category.
Sales of CDs and DVDs, once Best Buy’s bread and butter, have started diminishing as many people buy their music and movies digitally, the retailer has had to explore other avenues for growth. Revenue was $8.9 billion in the most recent quarter, down 4 percent from a year earlier, while net income, at $145 million, was down from $266 million a year earlier, though much of last year’s profit stemmed from a legal settlement. Sales at stores open at least a year were down 2 percent, in line with industry declines.