Future Shop stores lost out to fulfilled online shoppers
Consumers see online reviews as more objective and unbiased, say retail experts
Electronics stores are suffering from the rise of the pampered, fulfilled cybershopper who can now get everything online, even advice.
Experts say it’s no surprise that Future Shop shut down on Saturday, closing 66 of its stores and converting the other 65 to Best Buy outlets. It’s just the latest in a string of electronic store closures including most recently, all 14 Canadian Sony stores.
- Future Shop stores closed across Canada, some to rebrand as Best Buy
While online shopping is growing in popularity, bricks and mortar electronics stores always had something extra to offer — the opportunity for consumers to experience the product plus expert advice from staff who could decode those complicated gadgets.
But industry critics claim that incentive is waning thanks to a growing plethora of online written reviews, videos, and forums. Now, shoppers can learn everything on the internet and then buy their electronics anywhere — from Amazon to Walmart.
Showrooming is so yesterday
What information could that sales clerk give me that I couldn’t get online?- Ken Wong, marketing expert
Marketing expert Ken Wong says electronics shoppers have fewer reasons these days to step foot in a store because of what they can do online.
"They can access product reviews and comparisons, run price checks and even poll their network of ‘friends’ for their insights," says the Queen’s University professor.
Both Future Shop and its parent company, Best Buy Canada, have been suffering for years from what's called 'showrooming' — customers check out the goods in their stores, get expert advice from staff and then buy the products for cheaper from online–only outlets with lower overhead costs.
But now, says Wong, the problem has worsened as customers don’t even bother entering the store for advice where they might be roped into an impulse purchase.
"What information could that sales clerk give me that I couldn’t get online?" he asks.
The McMaster University professor says consumers are more apt to trust free online reviews than those doled out by a salesperson paid to push product.
"People leverage those [online reviews] much more because they see them as [unbiased] views," he says.
Malik does note that many people are still shopping in stores as opposed to online. But, he says, because numerous consumers are finding advice on the internet, there’s no reason to seek out an electronics specialty store.
"You can go pick up the same thing from Walmart and Costco," he says.
Elias Peixoto, 21, doesn’t even make it to Walmart or Costco. He says he buys most of his electronics online now and he always begins with a Google search to find advice.
He especially enjoys the "unboxing" videos on YouTube from the comfort of his couch. This is how he decided to buy the new iPhone 6.
"The reviewer will just tell you, here's what I like, here's what I don't like. And he'll show you the phone really up close within two to three inches of the camera so you can see everything about it," he says.
"I don’t really have to go in to the store," he adds.
Marketing expert, Ken Wong, says Best Buy needs to fight back by offering in-store incentives such as unique items and opportunities to play with products — not just powered up TVs on the wall or stereo systems on display that can’t be plugged in.
Best Buy turns to appliances
And it looks like Best Buy is on it. On the same day it announced the death of Future Shop, the company also stated that it is investing $200 million in both its stores and online shopping site to offer a "multi-channel customer experience."
The plan includes selling major home appliances in stores, a product many still prefer to buy in person. Best Buy is also promising to showcase better its in-store products and hire more staff to serve customers.
The company also plans to expand its program where online shoppers can reserve and then pick in-store items.
But, even with incentives, it may be a struggle to get contented shoppers off the couch and back into the electronics store when they are now served so well in cyberspace.
"It's a time-saver and so convenient because I can be sitting in my living room doing nothing and I can be shopping," says Peixoto.