Best Buy Needs to Start Taking Amazon.com Seriously
Oct 8th 2012 7:00PM
Updated Oct 8th 2012 7:12PM
Best Buy (NYS: BBY) apparently missed the memo.
Featured prominently in the 10th page of Sunday's circular, Best Buy is promoting Amazon.com's (NAS: AMZN) Kindle product line.
"Available Now" teases the copy for the $70 entry-level Kindle e-reader and the $160 Kindle Fire. The two plugs take up more than half of the page.
Yes, Best Buy shoppers. For just a handful of dollars, you can wean yourself off of the Best Buy world of books, DVDs, CDs, and video games. Goodbye, physical store visits. Hello, Amazon ecosystem.
It's certainly strange that Best Buy is still even selling Kindles. Wal-Mart (NYS: WMT) stopped doing it last month. Cheap chic retailer Target (NYS: TGT) booted Kindle products from its stores in a spirited round of springtime cleaning earlier this year.
The moves were deliberate. Wal-Mart and Target didn't stop stocking other e-readers and tablets. They were simply sending a clear message that they will no longer contribute to the coffers of a growing rival. What is holding Best Buy back from doing the same thing?
The struggling retailer knows better than anyone else that the showrooming trend is real. Folks are using Best Buy stores as physical showrooms, kicking the tires of big-ticket items before running off to buy these same electronics for less at online retailers.
We may never know exactly how much market share Amazon is wrestling away from Best Buy, but the divide is widening. Analysts see Best Buy's revenue declining 3% this fiscal year. Amazon's on track for a better-than-30% top-line surge.
Telling Amazon to take a hike with its Kindles won't change the trend. Best Buy still sells plenty of third-party gear that hands customers over to companies that serve up media directly. Best Buy has been selling Apple (NAS: AAPL) products for years, even though someone buying an iPod, iPad, or iPhone won't have much of a need for Best Buy CDs, DVDs, or books in the future. However, Apple isn't stabbing Best Buy in the back by also selling TVs and cameras -- for less!
Best Buy needs to draw a clear line in the quicksand. Brick-and-mortar chains need to stop serving up softballs for Amazon to whack over the fence. Anyone arguing that Best Buy will lose out on business that it needs by not stocking Kindle products is missing the point -- and the memo.
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The article Best Buy Needs to Start Taking Amazon.com Seriously originally appeared on Fool.com.Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Amazon.com, and Best Buy. Motley Fool newsletter services recommend Amazon.com and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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