Amazon’s march in focus

Dhaka,  Sat,  19 August 2017
Published : 11 Jul 2017, 13:54:28 | Updated : 11 Jul 2017, 14:00:46
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Amazon’s march in focus

High-street electronics store Best Buy led a sell-off across retailers Monday after news broke of Amazon’s rival offering to Best Buy’s Geek Squad installation service.

Best Buy skidded 7.6 per cent in mid-morning action in New York. The stock has still had a strong year, up 24.7 per cent, hitting a high on May 25.

The move topped a bad day for retail, with Gap falling 3.8 per cent to $21.77, Kohl’s down 3.1 per cent to $37.04 and L Brands down 2.6 per cent $43.92. Amazon rose 1.6 per cent to $994.76, according to a global media report.

The online behemoth has sent shockwaves through various parts of the retail sector with its increasingly aggressive push into areas that was the mainstays of bricks-and-mortar groups. Its planned acquisition of Whole Foods has shaken the grocery sector.

News website Recode highlighted Amazon’s “home services”, in which it offers consultations on “smart home solutions” and lets customers “set up a personalised shopping list for you based off your needs and interests”. The experts are “Amazon employees, not contractors”, Amazon notes.

The service is available in parts of Washington, Oregon and California, according to Amazon’s website, which adds that it is “coming soon” to other areas. In addition to offering another avenue for its products, such as its Alexa assistant, the offering could strike at demand for Best Buy’s Geek Squad.

Geek Squad was started in 1994, and made part of Best Buy in 2002. It offers computer repair and electronics installation services and currently employs 20,000 “agents”.

Best Buy does not disclose Geek Squad revenues, but said its services division accounted for about 5 cents of every $1 of sales in its latest fiscal year. Geek Squad’s impact may stretch more broadly, since it lures customers to bricks-and-mortar stores.

- SZ
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