Best Buy: Making Physical Retail Increasingly Irrelevant

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NEW YORK (TheStreet) -- If I was relegated to covering only retail companies, TheStreet would need to put me on suicide watch. It would have to take away all of my Morrissey and Elliott Smith records as well as Springsteen's Nebraska. Put me on the first floor of the hotel when I come to New York.

What a sad, melancholy-inducing lifeless sector that retail.

After visiting CityTarget locations in San Francisco and Westwood, I became even more depressed about the state of brick and mortar.

Target delivers smoke and mirrors a la Reed Hastings when it touts its urban locations as somehow distinct from its standard, sterile suburban strip mall outlets.

As I explained in December, there's little difference between a CityTarget, a SuperTarget and anything in between:

...Target breaks down how many square feet of real estate it uses by store type: Target general merchandise stores (395 stores, as of end of Q3); expanded food assortment stores (1,130); SuperTarget stores (251); and CityTarget stores (5).
On average, SuperTargets take up the most square footage at 177,291 apiece. Expanded food stores come in at 129,281 per. General merchandise stores run 119,084 square feet each. And CityTargets are not too far behind thus far at 102,800 square feet per location. Once inside you really cannot tell the difference between the stores, with SuperTarget the obvious exception.


Target brings on the melancholy with a strategy that could be so much more meaningful. As it stands -- other than being an unimaginative workaround urban-oriented city planning regulations -- there is no meaning. CityTarget is nothing more than a smaller store. That's it. Zero innovation.

This lack of anything resembling thoughtful disruption pervades the retail sector with the exception of what Steve Jobs pioneered way back when at Apple and Howard Schultz pursues relentlessly with lots of help from mobile and digital at Starbucks .

Most retailers pull from the same failed bag of tricks, copying one another as they create false hope among investors. Because Bill Ackman says its so, we can officially call Ron Johnson's tenure at JCPenney a "disaster." What has Johnson done other than nothing? Stores within stores do not represent innovation, transformation, revolution or any of the positive buzzwords we misguidedly associated with Johnson's name while at Apple.


At least Wall Street reacts properly to Johnson, by and large abandoning JCP stock. But, somehow, a company equally as lame -- Best Buy -- thrives in pretty much the same environment.

Best Buy announces a store-within-a-store strategy with Samsung and its stock tacks another percent on to its patently absurd 115% year-to-date increase. This run transcends dead cat bounce. In fact, the feline dove from the top of the skyscraper and landed on its feet.

If the Samsung deal continues this trend -- with Microsoft and BlackBerry jumping aboard -- there will still be absolutely nothing to get excited about.