Best Buy Shrinks 12 Volt Assortment

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Best Buy

Best Buy is limiting the number of stock keeping units it buys from its current car audio suppliers, according to several industry sources.

The big box retailer is shrinking its car audio assortment and has told many of its suppliers that every SKU has to perform.

“You have to justify every SKU.  They will drill down and make sure every product has a good chance of success,” said one supplier.  ‘There’s no more keeping SKUs simply because there’s a relationship with the supplier,’ said another.

Best Buy would not respond to our inquiries.

By some accounts the chain is stuck between being a specialist or mass merchant.  It won’t commit the resources to be a true car audio specialist. and so by default, the car audio department is behaving like a mass mover of high volume products.  (We are not dissing many of the talented installers at Best Buy by this statement.  Just read on.)

Here’s another part of the problem.  The car audio market has become a collection of many smaller niche cateogries in the past 5 years.   Niche products require specialization, and Best Buy is not making the investment in these smaller product areas from what we see. Just look at the advertising.

Products like back up cameras or high end integration kits don’t  show up in ads because they don’t draw a large enough return on the investment in terms of driving people into the stores. But that’s where a lot of the innovation lies.  So Best Buy’s ads looks like throwbacks to 5 years ago with a couple of decks and a pair of speakers.

Besides the fact that its an embarrassing representation of our industry, it’s also sad, because Best Buy has the power to build these small categories through its marketing muscle.

But here’s the real rub.  Best Buy is not jumping on the Connected Car bandwagon that is certainly the future of car audio.  Look at Car Toys; the 50 store chain out of Seattle is investing millions to completely revamp a demo room in every store so it can show off how to connect smartphones to car radios.  And that’s what people want.

According to a J.D. Power study published this spring, connecting the phone to the car is the number one in-demand emerging tech feature sought by consumers. 82 percent of smartphone owners want their device to communicate with the car!

The chain has made some efforts to shore up car audio, only to abandon them.  These include a joint project with Car Toys in training employees and in selling car audio to car dealers and fleets.  It also had an arrangement with Ford to help consumers match up phones to the Ford Sync audio system. All, to our knowledge, are defunct.

As many of our retail friends posted in comments on our facebook page, an investment in niche technology and expertise is required to be successful in car audio.  If you treat the category like a commodity, then that’s all it will be.

Source: CEoutlook

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3 Comments

  1. Your missing the Point. There is almost no markup in a radio swap anymore the profit is not what it was 10 years ago we can thank best buy for this by discounting products to a no profit margin. However you need to think the signal best upgrade to any factory system is what it always has been replace factory speakers out in about 80% of the cars on the road today and you have improved the sound.
    Auto makers don’t spend much money on Factory speakers they get the cheapest thing they can and call it an infinity or some other name brand system.
    No offence Infinity made some nice aftermarket stuff but that wasn’t why there name was on the factory stereo systems it was the Amp that got it put there the speakers were junk!

  2. I really see nothing bad about this, Best Buy has always been a bad representation of mobile audio. I am glad that the independent retailer, will gain some knowledgeable installers from BB as they migrate away from mobile. Overall it sounds like one less race to zero player in the market and more potential for the independent retailer to fill the void in the market.

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