Best Buy (NYSE: BBY) has apparently decided it can't come up with an original idea of its own, so it is trying to copy some of the better ideas of its competitors. Instead of simply flooding untapped markets with new stores, like competitor hhgregg (NYSE: HGG), Best Buy has been trying different things to get customers back into stores. It remains to be seen whether these ideas will help the retail giant compete when consumers have a lot of choices.
Here are three major changes the chain is making to stay relevant:
1. Find it easier online
With customers moving online and out of its stores, Best Buy has begun to beef up its online store in a bid to compete better with eBay and Amazon.com (Nasdaq: AMZN). It's added six third-party sellers to the Best Buy Marketplace. If this sounds familiar, it is the method that leading Internet rival Amazon has been successfully using for years. The idea is that the customers who come to browse at Best Buy stores and purchase elsewhere will now have the option of finding the same products online, hopefully at competitive prices.
2. Clean out gaming clutter
Best Buy has long been a source for new video games, including offering special exclusive content when titles are pre-ordered in stores. It is stealing a page from GameStop's (NYSE: GME) book, however, by offering gift cards for previously played video games. To encourage the purchase of new games, Best Buy also offers 40% more in trade-in value with the pre-order of any game at the time of trade-in. Selling used games has long been a staple of GameStop's business, and Best Buy is trying to sneak in and get a piece of this market.
3. Who doesn't own a cell phone?
It wasn't too long ago that cell phones were bulky gadgets that functioned primarily as phones -- you know, for making calls. Today's smartphones can do more than some computers; many people carry these small computers everywhere they go. Best Buy is going after this market with Best Buy Mobile stores, which are 1/25th the size of a normal store and have an exclusive focus on selling mobile devices.
RadioShack (NYSE: RSH) has also focused on mobile phones in an attempt to draw more business. It started by dumping T-Mobile for wireless leader Verizon (NYSE: VZ), and now runs 1,400 wireless kiosks inside Target (NYSE: TGT) stores. While these kiosks are smaller than the Best Buy Mobile stores, RadioShack also has its own storefronts to rely on for generating wireless sales.
Will it work?
Best Buy is trying hard to find a way to get customers to its stores, and only time will tell if it will continue to lose customers to other retailers. Fellow Fool John Maxfield is bullish on some retail stores without a decent online presence. Add Best Buy to My Watchlist to see if these new ideas will help performance in the long run. You can find other stocks that are changing the face of retail by signing up for this special free report.