Best Buy reported revenues short of analysts’ estimates, coming in at $16.6 billion against an expected $17.1 billion. The company is planning to close 50 traditional bricks and mortar stores and add 100 mobile kiosks over the next year. The move will result in a savings of $800 million over the next three years, $250 million of which will be realized in the current year.
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Faced with a rapidly changing retail environment, the company is trying to increase sales
along with profits. The so-called “Big Box” business model
the company is known for no longer works. It has fallen prey to the changing retail landscape that is making specialty stores obsolete. Consumers are increasingly buying online, which gives them access to a broad array of products. Specialty stores are no longer the destination for consumers looking for the latest electronic devices.
Online retailers like Amazon and Apple have driven the new way consumers shop for electronics. Best Buy hopes its new "connected store" formats will help it compete by reconfiguring the company's business model toward services featuring tech support and wireless connections.