Advanced Television

Not so Best Buy

November 7, 2011

Carphone Warehouse is giving up on its Best Buy chain of electrical goods megastores in the UK.

The chain was a joint venture with the US parent – America’s biggest seller of consumer electronics – and came about as part of the deal where Best Buy US paid £1.1 billion to take a 50 per cent stake in Carphone – Britain’s biggest seller of mobile phones and the owner of ISP Talk Talk.

Only 11 of the planned 100 European stores opened and all will now shut.

Just a few years ago, the vast majority of UK consumer electronics, or ‘brown goods’ as the trade used to know them, were sold through Dixons or Comet. If you wanted to sell a new gadget or a new model you had to genuflect – literally and financially – to the buyers of these chains. No shelf space, no sales.

Dixons is no more – rolled into sister brands Curry’s and PC World and Comet’s latest owner is looking for a way out of the loss maker.

Now, Carphone Warehouse’s ambitions of being an integrated provider of communications and entertainment services and equipment are on hold (Talk Talk TV anyone?)

One of the reasons for the struggle is the already integrated proposition that pay-TV and other providers bring – when you buy Sky or Virgin or BT Vision, the key piece of equipment comes as part of the package.

For the larger more expensive items – like big HD screens – people know that once you’re beyond the cheap end brands you’ve never heard of, the differential between the rest is just about badge snobbery. Buyers might check a set out in a shop but will often then go and buy the best deal on line.

Cheaper items – like DAB radios – they are happy to just buy online anyway, and their mobile phone model will either be the best one they’re offered by their MNO or dictated by fashion and peer pressure.

The only hope for major retailers is to become the integrators of the coming home networks – to take the geek squad and expand it beyond plugging in the PC printer. They must make my whole personal network (in home and out) sing and be there – quickly – to fix it when it doesn’t. And they must do it at a price that makes sense to me or my main service provider, or both of us.


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