November 7, 2011 7:42 pm

US retailers shift to online sales

Barnes & Noble, Walmart and Best Buy have underlined the shift of retail to online sales by unveiling three separate moves aimed at consumers who increasingly shop by switching back and forth between the internet and bricks-and-mortar stores.

Barnes & Noble, the US’s biggest bookseller, on Monday unveiled a tablet computer to compete with devices from Apple and Amazon, while Walmart has opened two small test stores in Californian malls that are designed specifically to draw customers to its website.

Best Buy, the biggest US electronics retailer, said it would close its lossmaking “big box” stores in the UK, buy out its British partner in Best Buy Mobile for $1.3bn and refocus globally on selling internet-enabled devices ranging from phones to televisions.

The moves come as traditional retailers struggle to keep up with the digitisation of media content, the power of smartphones, and consumers who browse for products online and then buy in stores, or browse in stores and then buy online.

Barnes & Noble’s business model of running cosy book stores with comfortable chairs and coffee has been undermined by Amazon, the online retailer.

Its tablet computer launch on Monday – under the brand of its Nook e-reader – was its latest effort to secure a stake in the distribution channel through which a growing number of consumers are consuming books, music and video.

The $249 Nook tablet will be available from next week and will compete with Apple’s iPad and Amazon’s $199 Kindle Fire tablet, which also begins shipping next week. William Lynch, Barnes & Noble chief executive, stressed that its store network and employees would enable it to provide better customer support than Amazon.

He also said the Kindle Fire’s memory capacity meant it was “deficient”.

Analysts said Best Buy had suffered from shoppers using its stores as a “showroom” for Amazon, the online retailer.

Brian Dunn, Best Buy chief executive, told the Financial Times: “Multi-channel retail is the right solution. Digital by itself won’t be enough. Physical by itself won’t be enough.”

Walmart’s use of two new test stores to promote the brand reverses the practice of using online advertising to attract customers to retail stores. However, the stores are scheduled to stay open only until the end of this year.

Ecommerce accounts for no more than 2 per cent of Walmart’s US sales according to estimates by RetailNet Group, an advisory firm.

Keith Anderson, senior analyst at RetailNet Group, said many traditional retailers were beginning to invest substantial capital in their online businesses for the first time.

“The landscape is moving so quickly that people are changing capital expenditure plans they made just ten weeks ago and saying they were too conservative,” he said.

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