Mergers That Could Dethrone Amazon: Best Buy (BBY) and Walmart (WMT)
As rough as the advent of Amazon has been on Walmart, it has been even rougher on electronics retailer Best Buy Co Inc (NYSE:BBY). Indeed, it was Best Buy’s suffering at the hands of Amazon that gave rise to a new term: “showrooming.” Consumers would visit Best Buy stores to take an in-person look at electronics, and then visit Amazon.com to buy it.
And now, Amazon reportedly is going after Best Buy via its own “Geek Squad”-esque service.
Although showrooming is at least a little less evident at Walmart’s stores, electronics are still the retailer’s biggest single non-grocery department, and it has suffered alongside Best Buy on that front. See, 16% of Wal-Mart’s revenue is driven by electronics, and 20% if you count video games in that mix.
Things are changing for both organizations. Walmart is, by design, remodeling its electronics departments to look an awful lot like Best Buy, and Best Buy is starting to turn things around, having finally figured out how to compete with Amazon. Last quarter’s online sales were up 22.5%.
The two companies are on the verge of beating Amazon in an arena where it’s a fierce competitor, and together they may finally be able to beat the giant at its own game.