Friday, May 4, 2012

Retailers Should Expand Mobile Accessories And Services To Stay In Business

With CompUSA and Circuit City gone, we should have guessed Best Buy’s better days are ahead.  Apparently, that wasn’t the case. When Best Buy reported bad earnings earlier, it was like the end of the world as far as big box electronic retailers are concerned.  In the brick-and-mortar space, who really does BB have to compete with?  Walmart?  Target?  Okay, Costco?

Then the attention quickly turned to Apple’s gears at Best Buy.  Why?  Because despite close relationships with Apple, Best Buy selling Macs and iOS devices doesn’t bring in the big bucks because of the thin margins.  So, the best that Best Buy can hope for is that Apple displays and products will bring in foot traffic.  And with Walmart and Target potentially opening up mini-Apple stores (they’re more like small areas dedicated to Apple stuff), they are looking to bring in a higher income audience.

But I think that could be the wrong way to go about it.  Rather than just push the iPods and other iOS devices, these guys should be pushing accessories which are potentially more lucrative.

I got this idea when I was at the mall last week and I saw at least four kiosks selling iPhone and iPad cases.  That’s all they sell.  And they’ve been around for like ever.  There was even a store that sold mobile cases, most of which were for the iPhone.  And I also saw a couple of places that just added the protective film on mobile devices.  And they were busy.

If I’m the CEO of Walmart or Best Buy, I think I would not only invite Apple in but next to the Apple area, set up a bigger mobile area to sell iOS accessories and services.  If those kiosks can survive the super-high mall rents, you can be sure they’re very lucrative.  And maybe, just maybe, things can turn around for the brick-and-mortars.

I think the prime candidate for my idea would also be Radio Shack.

And I don’t think it’s all that hard for Best Buy, Walmart, and others go to go China and find factories to make their own branded iOS accessories.  A case probably cost a $1 to make but you can turn it around and sell it for $30-40.

Not a bad racket.  And this is a service their online only competitors like Amazon, cannot offer.

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