What Will Best Buy Look Like in 10 Years?
Growing up, I used to love taking trips to our local Best Buy (NYS: BBY) store. CD players were just becoming popular, and I was saving money to buy my first boom box. I must have spent hours wandering the aisles trying to find the best one.
The days of boom boxes are long gone, and as music and electronics have evolved, Best Buy has had to change along with them. Stores are no longer overrun with racks and racks of CDs and movies, as consumers have found better ways to shop for them. Companies like Netflix (NAS: NFLX) and Hulu, along with online retailers, have probably ensured that CDs and movies will continue to be a smaller section at Best Buy stores.
Instead, the Geek Squad has taken over a corner of the store, and Apple (NAS: AAPL) -- once non-existent at the PC-centric store -- has a station all to itself. There still isn't a better place to go big-screen shopping, but buying a big screen? I'll check prices online before I pull the trigger.
So with retailing moving online and streaming becoming available everywhere, what is Best Buy going to look like in 10 years? The company may be starting to answer that question for us.
Electronics I can't do myself
Best Buy has offered to hook up your new flatscreen or cable box for years, but as a semi-tech savvy person who can plug in cables with the best of them, I thought those were just high-priced services that only a small number of customers would need.
Then Best Buy bought Geek Squad and took computer services to the masses. Until Geek Squad, I wouldn't know who to turn to if I needed my computer fixed. If my most tech-savvy friend couldn't fix things, it was probably off to the trash heap.
But that may be just the beginning of Best Buy's move into services.
You're selling what?
Best Buy has partnered with Ford (NYS: F) to sell electric-car chargers for the home, a big step into a new industry. Instead of relying on dealers, Geek Squad will handle the logistics of an electrical audit and professional installation of the charging installations for the Ford Focus Electric.
It really makes sense if you think about it. Best Buy has always been about electronics, and as it has added services, Best Buy has really been about making electronics easier for consumers. Televisions, cable, computers -- Best Buy can hook the least technical person up with a state-of-the-art system.
And this isn't Best Buy's first foray into the transportation business. Did you know Best Buy used to sell Brammo electric motorcycles on a limited basis?
The partnership with Ford may just be the beginning of Best Buy's strategy shift. When I think of new electronics I'd like to have but don't have the first clue how to hook up, two things come to mind: electric vehicles and solar power.
Beyond knowing to call an electrician, I, like most people, wouldn't have a clue how to set up a 240-volt car charger. And with Best Buy bringing retail chargers to the masses, it may be a step toward bringing solar power into the fold later on.
Home Depot (NYS: HD) and Lowe's (NYS: LOW) have started retailing solar panels, and Best Buy may be able to provide a better service experience. Solar power at Best Buy would also fit with Ford and SunPower's (NAS: SPWRA) new solar partnership.
The future of Best Buy
Maybe it isn't all bad that CDs and movies are dying at Best Buy. It's giving the company an opportunity to broaden its horizons and become less of a showroom for online retailers.
Maybe some time in the not-so-distant future, you'll leave Best Buy with a service appointment to hook up solar panels to a charger for your new electric car. As electronics become more complex, Best Buy's services may become more valuable.
Those geeks know everything, don't they?
At the time this article was published Fool contributor Travis Hoium owns shares of SunPower and has sold puts in SunPower. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.The Motley Fool owns shares of Ford Motor, Apple, and Best Buy. Motley Fool newsletter services have recommended buying shares of Lowe's Companies, Home Depot, Netflix, Ford Motor, Apple, and Best Buy; buying puts in Netflix; creating a bull call spread position in Apple; and writing covered calls in Lowe's Companies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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