Best Buy (BBY) Goes "Green", Wastes Money

Best Buy (BBY) has decided that people want “green” products, or it has decided that it looks good to sell them. It may take awhile to find out if the move is simply one to get good PR.

The big consumer electronics store chain may be getting too far afield from its main line of products, which has a danger of costing it money that it will have trouble getting back.

According toThe Wall Street Journal, “America’s largest consumer-electronics retailer by sales has quietly begun offering electric-powered scooters, bicycles and Segway Inc. transporters.”  Many of these are expensive products and will be hard to sell with the economy slowing and consumer spending down.

The only benefit of selling the fuel-efficient bikes may be that curiosity about them will bring shoppers to Best Buy locations. Those shoppers may not want new transportation, but they will probably have a look around at the rest of the merchandise at the stores. That could help sales.

The Best Buy move may be telling if it points to the lengths that struggling retailers will go to get people into their outlets. Plasma TV and PCs are a hard sell when people and small businesses are extremely worried about their prospects. Best Buy’s sales are bound to be depressed for a time no matter what odd products it puts into its stores. Dropping prices is its only options for increasing unit sales, but it also kills margins.

Selling Segways is a good way to waste investor money. If consumers wanted them, they would go to an electronic bike dealership.

Douglas A. McIntyre