Property Profile: Best Buy
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Move over Circuit City: just like in Highlander, there can only be one. In this case, that “one” refers to Best Buy, a company that feels like it’s been part of the American business landscape forever.
However, there’s more to this company than meets the eye.
The company began back in 1966 when founder Richard M. Schulze wanted to have a car stereo and home music store for Minnesota youths. It was originally known as The Sound of Music Co but changed to Best Buy in 1983.
The idea of taking consumer electronics and offering them at low prices wasn’t completely unheard of, but Best Buy’s specific superstore format combination took off with the public.
Best Buy outlasted Circuit City and other competitors and is still found across the US.
The Retail Renaissance: In-Store Shopping Is Back in 2022
One of the key points of the post-pandemic era is that consumers want in-store experiences instead of just virtual ones.
It is often seen as a backlash against the long quarantine periods experienced by many at the height of the pandemic.
Rediscovering a Comfortable Consumer Shopping Experience
Now that pandemic-era restrictions are fading away quickly, others are looking to not only get back into retail but expand their retail offerings.
Virtual and augmented reality can add to the retail experience, but consumers still want to go back to in-person experiences since this is the most concrete example of shopping possible.
People are ultimately looking for their experiences before the pandemic existed. They want to have that comfort again, and retail spending is familiar, comfortable, and consistent.
Anchor Stores as Customer Acquisition Boosters
One of the best ways to attract quality acquisition offers is to look at the stores in the immediate area and a tight radius around the target location up for sale.
Retail depends on the strength of other businesses around it. The other stores tend to do well when one area is prosperous because spillover traffic is quite common.
Best Buy and Its Iconic Branding
In the real world, this plays out as consumers go from one store to another, looking not just for what’s on their shopping list but other things that might fit in with their tastes.
Best Buy has not just location presence but name-brand recognition. According to Forbes, color alone improves brand recognition by 80%, and Best Buy’s logo is iconic at this point.
When Best Buy is in a retail location, it tends to become the standout anchor client. This is the case whether you’re looking at a Best Buy in Corpus Christi, TX, or one in Bowling Green, KY.
Evaluating Acquisition Viability By Retail Stickiness
Retail isn’t just about a one-time visit. For maximum success, stores rely on returning visitors and positive word of mouth.
Even in a digital world, word of mouth is extremely powerful. According to SEMRush, word of mouth is responsible for over $6 trillion in annual global sales. Yet that isn’t the only benefit: word of mouth improves customer brand loyalty by a wide margin.
Best Buy Deploys Helpful, Fixed-Wage Employees
The stickiness factor of retail is one of the key drivers of success. In the case of Best Buy, shoppers enjoy going to Best Buy because they aren’t bombarded by salespeople that are driven by commission.
Instead, they are greeted by people on a fixed wage and encouraged to be helpful without being too pushy.
The customer is taught by brochures and other in-store information how to be self-reliant, which gives the consumer a good feeling through transparency. Consumer electronics have their own learning curve, but brands that make consumers feel empowered experience more sales.
How Large Brands Also Improve Other Tenant Outcomes
Studying property profiles is a good idea not just for those looking to purchase in the retail space but also for those looking to lease retail space.
Indeed, the same principle applies: stores in a general location tend to feed off each other’s successes and opportunities. Customers who have already spent the mental energy to venture outside the home want to make sure that each trip feels well spent.
Understanding the Retail Ecosystem
Offering additional experiences that complement the products in other stores is a great move for those looking for property to rent, not just to buy.
The best way to put this into practice is to look again at companies like Best Buy that work on bringing retail in as an experience, not just a place to pick up products.
The Best Buy format requires stores that are well-lit and color consistent. Deals on consumer electronics range across the board, but a warranty is one of the best ways to earn customer trust.
The 2022 Outlook for Consumer Electronics: A "Smart" World
In order to understand where Best Buy is going, it’s important to look at consumer electronics in terms of total market growth. The entire consumer electronics industry is worth $1 trillion annually and is projected to grow outward from here.
One of the key drivers of this growth is the smart home movement, driven by tech giants like Google and Amazon.
The idea of a home that’s controlled by technology isn’t as new as it sounds; the time switch was invented in the early 1920s!
Smartphones and consumer electronics are closely intertwined and designed to work together. Even older consumers have embraced technology at higher levels than what was first anticipated.
Rolling Out the Red Carpet for Future Acquisitions
The aesthetics of a building is a driving factor for acquisitions, but what’s even more important would have to be how the retail space is structured. Size is only one aspect of a space. The functionality of the space is key.
As more people come back to the in-person retail experience, Best Buy and other major retailers will likely be used as the template for how in-person interactions should be.
Best Buy is a major retailer that has outlasted many competitors, some by sheer luck and others by not being afraid to pivot when consumer sentiment in the marketplace changes.
It will be interesting to see how retail continues to evolve in the years to come, especially as the public becomes more entrenched in the post-pandemic era.
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