Buh bye, Best Buy cell phone stores, margins were good while they lasted

Buh bye, Best Buy cell phone stores, margins were good while they lasted
Best Buy is gearing up to shutter all of its dedicated cell phone stores that it has dispersed in malls around the country way before the first iPhone was even introduced. The reason? Well, they now cost more to operate than the big-box Best Buy store, and the profit margins on smartphones aren't that great anymore either. For the middle man, that is, not their manufacturers, which have been raising prices to offset a demand decline, which in turn offsets the demand even more, but we digress. 

The sales from the 250 or so dedicated phone shops that Best Buy has around the US, are barely cracking a percentage point of its revenue, and these have to go now. People are increasingly buying smartphones on their smartphones, researching and ordering online from their carrier, or from Apple or Samsung, so a specialized store seems like a relic of the past. 

Funny enough, people are often getting the new models directly, without even going somewhere to play around with them first, as even before a phone is announced now, more or less all the important design and specs upgrades are already known, and it is previewed extensively down to the smallest detail shortly after launch. 

Back in 2011, Best Buy had the intention to open no less than 800 of those 1400 square feet stores around the country, but the consumer habits' shift, and the general demise of brick-and-mortar locations, have apparently nixed those plans.

source: Market Watch

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8 Comments

1. SyCo87

Posts: 289; Member since: Sep 19, 2013

Those are always empty.

2. sgodsell

Posts: 6902; Member since: Mar 16, 2013

If you went in one, they would always point you to the bigger best buys anyway. If best buy was smart, then they could have kept more merchandise on hand, for other things. Even more stuff related to smartphones, like home lights and appliances. Even toys related to smartphones. But no mainly cases, a few battery packs, and hardly any smart watches, or fitness trackers. They would tell you to go to the bigger stores. So I can't say I will miss them. Classic case of not keeping up with peoples wants or needs.

7. SyCo87

Posts: 289; Member since: Sep 19, 2013

Smart products would have made more sense as you have a more intimate setting to engage customers, but they wouldn't have been able to fit appliances in there. It was way too small for that.

3. bucknassty

Posts: 1311; Member since: Mar 24, 2017

only way i'm paying full price for a new phone is if i get great rebates or money off... phones are plateauing

4. Jrod99

Posts: 703; Member since: Jan 15, 2016

Seen this coming. Not a big deal.

5. CreeDiddy

Posts: 2128; Member since: Nov 04, 2011

Most people would shop for phones in BB retail stores. This Mobile division made no sense.

6. k9luvr

Posts: 122; Member since: Oct 17, 2016

Concept was good. Timing was bad. Mall rats are impulse buyers. They always pay too much for everything they buy. Times are changing even the slow to catch on people are now buying more online. Best Buys large stores won't be far behind.

8. TechDork

Posts: 400; Member since: May 10, 2010

I'm not really surprised. My mall has one and I've walk right past it as with many other people do. I went in there one time to get a screen protector and that was it lol.

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