TORONTO — When U.S. electronics giant Best Buy Co. Inc. [BBY-N] snapped up Future Shop in 2001, critics took shots at its decision to run with both retail banners in Canada as being an unnecessary expense.
But Best Buy has proven the naysayers wrong. The two-name strategy has worked, giving consumers yet another place to shop, company executives say. Over the past six years, the retailer has managed to almost double its market share to more than 30 per cent from 17 per cent of the domestic electronics market, they said yesterday.
In fact, the approach has worked so well that the U.S. parent is now copying the two-banner model in other countries that it is entering, said Bob Willett, chief executive officer of Best Buy International.
"It increases the choice to the consumer," Mr. Willett said after a presentation to the Retail Council of Canada annual conference. "There are whole segments of different behaviour and different customers in Canada. They don't all want the same thing. They don't all want to shop in the same boring environment."
But Best Buy has proven the naysayers wrong. The two-name strategy has worked, giving consumers yet another place to shop, company executives say. Over the past six years, the retailer has managed to almost double its market share to more than 30 per cent from 17 per cent of the domestic electronics market, they said yesterday.
In fact, the approach has worked so well that the U.S. parent is now copying the two-banner model in other countries that it is entering, said Bob Willett, chief executive officer of Best Buy International.
"It increases the choice to the consumer," Mr. Willett said after a presentation to the Retail Council of Canada annual conference. "There are whole segments of different behaviour and different customers in Canada. They don't all want the same thing. They don't all want to shop in the same boring environment."
I will admit to having been one of those naysayers. In addition, the story at the time was that Best Buy was going to rebadge Future Shop stores as Best Buys over a two year span.
In hindsight, that story was obviously incorrect.
As much as I enjoy making fun of Best Buy, they obviously know how to do some things right, or they wouldn't occupy the top spot on the CE retail food chain. I think that maintaining distinct banners with different store cultures helps maintain some semblance of diversity in the marketplace, is good for consumers, and allows retailers to experiment with what works well versus not at all.
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