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Box Stores Must Find Way to Adapt: Analyst

Best Buy’s

Sears
Sears

decision to close 50 of its U.S. stores and focus on its Geek Squad service company through 100 small mobile locations in fiscal 2013 is the latest example of how the “big box” is struggling against digital competition.

Eddie Lampert, the head of Sears Holdings, didn’t exempt his own company when he told CNBC on Wednesday that Sears , Best Buy ,

and J.C. Penney were among the retailers “in need of reinvention.”

Best Buy’s

Bryan Gildenberg, an analyst with Kantar Retail, agreed, but told CNBC in a separate interview that he doesn’t think “anybody’s doing it particularly right” at present.

Best Buy is probably the “furthest down the road” in terms of reinventing itself, but it also has some of the biggest challenges, he said. Digital competition is one; another is a “demographic trough,” where baby boomers are “aging out of the need for large stores.”

Then there’s the “Millennial” generation, which is more comfortable buying digitally. “They’re not buying the same things and they’re not buying them at the same prices” as older consumers, Gildenberg said.

Best Buy’s

Lampert’s own Sears has been “on the wrong end of almost all” the bad trends affecting big box stores, including being based at malls, having customers who come in to look but buy online, and an aging demographic, Gildenberg said.

However, he said, Sears has “gotten some good publicity” for how it’s tried to create a “different type of relationship with customers.”

As for Best Buy’s focus on Geek Squad, he said, “over time you’ll see more and more retailers try to help shoppers in-store over hurdles, so they can move from browsing to buying." They have “started to do a nice job of selling things as an organized solution.”

Additional News: Eddie Lampert: Retail Needs to Adapt or Die

Additional Views: Retail Stocks Show Strength Outside of Luxury

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Disclosures:

Disclosure information was not available for Bryan Gildenberg or his company.

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